Posted on

Young Monday: Avalanche, Warner Music and Goldman Sachs

FTX bankruptcy: Goldman Sachs sees it as the crypto world's turning point

Avalanche chooses Alibaba’s cloud for its nodes, Polygon is working with Warner Music Group and Goldman Sachs explains the lessons of FTX’s collapse

In the crypto world this week, there has been renewed talk of adoption. In particular, there is more news of partnerships between traditional and Web3 companies. Avalanche, AVAX’s blockchain, has signed a deal with Alibaba Cloud, one of the world’s leading cloud service providers. After having secured partnerships with Instagram, Reddit, Disney, Starbucks and other companies, Polygon now also boasts a music partnership thanks to an agreement signed with Warner Music Group. A month after the collapse of FTX, two financial giants, Goldman Sachs and Mastercard, describe the collapse of the exchange as a growth opportunity for the industry!

Avalanche will use Alibaba’s cloud for node management

Alibaba Cloud, the most widely used cloud hosting service in Asia and the third largest in the world, has chosen Avalanche as its first Web3 partner. Alibaba Cloud provides cloud-based storage, applications and web infrastructure services. Clouds are global networks of servers that operate as a single ecosystem. They can be accessed through the Internet and serve to free up memory and processing power on the devices we use on a daily basis.

Through its cloud service, Alibaba will facilitate the process of opening an Avalanche blockchain node. In addition to staking the native crypto, validators of a Proof-of-Stake blockchain must manage a node that is constantly connected to the internet. This requires computing power and memory. Thanks to this new partnership, anyone wishing to open a node on Avalanche will be able to use these resources by taking advantage of Alibaba’s services. The partnership could increase the number of blockchain validators, which to date number around 1,200, and consequently also increase decentralisation on the network.

Polygon and Warner prepare the next Spotify?

Polygon is interested in all entertainment sectors that intend to use Web3 technologies. After cinema and social media, it is time for the platform to attack the world of music, thanks to a partnership with Warner Music Group. The collaboration between the two brands resulted in the development of LGND.io, a decentralised application (dapp) very similar to a classic music streaming platform such as Spotify or Youtube Music. LGND also allows tracks and albums to be purchased in the form of NFTs, using either credit or debit cards or cryptos such as MATIC and ETH. Once purchased, these NFTs can be resold on major NFT marketplaces, such as OpenSea.

The main objective of the collaboration is to provide emerging artists with a new way to sell their music through NFT technology and the concept of digital ownership. The final version of the platform will be available from January 2023. It will enable artists to not only sell non-fungible music tokens, but also other types of content that provide various benefits such as VIP concert tickets or exclusive merchandise. In addition to Polygon and Warner Music Group, the record company Spinnin’ Records will handle relations with artists. They also participated in the development of LGND.io.

Goldman Sachs: FTX bankruptcy is a turning point for the crypto world

This week, financial giant Goldman Sachs made some statements on the failure of the FTX exchange and its consequences. Rather than analysing what happened only from a destructive point of view, Mathew McDermott, Goldman Sachs’ head of digital assets, stated that he is optimistic about the future of crypto. McDermott’s statements followed a remarkable fact, namely that following the collapse of Sam Bankman-Fried‘s exchange, the number of traditional investors interested in buying crypto through Goldman Sachs is on the rise.

Mastercard also seems to be of the same opinion, according to Grace Berkley, the director of the company’s start-up branch. Berkley described the incident as a reset opportunity for the crypto world, which could become safer through the exclusion of malicious actors intending to manipulate the market and regulation.

Decentraland: start of LAND leases

A new feature for Decentraland has been announced: LAND rentals in exchange for rewards! Decentraland is one of the most popular metaverses on Web3. It consists of many units of ‘digital land’, and each of these units is an NFT called a LAND. Lending your own LAND is now very simple, just select the NFT you want to put up for rent and choose for how long and at what price you want to rent it. As far as the time period is concerned, each user can choose from seven options: 1, 7, 30, 60, 90, 180 or 360 days. Concerning the price, the decision is entirely up to the tenant.

The rent is paid by the tenants in MANA, the crypto of Decentraland, and 2.5% is retained by the DAO‘s wallet. The DAO of Decentraland is the collective institution that governs the functioning of this metaverse.

Why rent a LAND? Buying one may be too expensive, all the more so if you plan to create events or experience in a limited amount of time. The market for land in the Metaverse is one of the most expensive of the NFT markets. There are only a few LANDs in Decentraland sold directly from the platform, the remainder are only available in secondary markets, which are very competitive. Users will be able to rent their land to DJs who will throw memorable virtual parties, or to universities who will build Web3 university campuses, or even to fashion brands who will organise fashion shows.

Posted on

After crypto, will China now also ban NFTs?

NFT news from China: will they become illegal like cryptocurrencies?

Will NFTs become as illegal as cryptocurrencies in China? A Chinese court issues a ruling and the debate opens up

A few days ago, the Hangzhou court in China ruled that NFTs must comply with laws established for e-commerce sales and those related to virtual property, due to their characteristics of ‘value, scarcity, traceability, and marketability’. The ruling was particularly lenient towards the sector after the 2021 ban on crypto. What might be the next developments following this news? Will NFTs become illegal in China?

Cryptocurrencies are banned in China

In 2021, the Chinese government officially banned crypto mining and trading. On the one hand mining was banned for environmental reasons (taking 50% of all global mining activity out of the country). On the other hand, crypto was banned for possible ‘speculation’ risks. All crypto-to-crypto and fiat-to-crypto transactions are therefore illegal in China. This is the case for both local and foreign platforms. The Chinese government had however not taken a decision at the same time to regulate NFTs.

Are NFTs legal in China?

From a legal point of view, NFTs are not banned in China. However, since their technology is linked to cryptocurrencies, the situation is complicated. A first aspect to consider is that, given the ban on crypto, non-fungible tokens cannot currently be purchased via cryptocurrencies. Generally speaking, although the Chinese government is not hostile to the concept of NFTs per se, it remains intolerant of possible financial applications and even simple buying and selling.

In this regard, on the 13th April 2022, the National Internet Finance Association of China, the China Banking Association and the Securities Association of China shared guidelines to ‘prevent financial risks related to NFTs’. These are not laws because these associations have no legislative powers, but rather steps to be taken to prevent users from associating tokens with the same concepts of ‘speculation’ that led crypto to be banned. These guidelines are like a test for those who want to create and sell NFTs in China and could guide future choices by the authorities by building standards.

Some of these measures are:

  1. Using only the state blockchain to create NFT (more on this blockchain later);
  2. Referring to NFTs as “virtual collector’s items” and not as “tokens”;
  3. Avoiding any association with crypto;
  4. Suspending NFT secondary markets;
  5. Using platforms that verify the identity of users.

A black market is born

The crypto ban has led many Chinese citizens to use virtual private networks (VPNs) that can circumvent the Chinese government’s localisation and censorship of international crypto services. In this manner, Chinese citizens can access marketplaces like OpenSea and Magic Eden, where they can buy crypto tokens and resell them according to their own strategy. It is estimated that 31% of Internet users in China use a VPN. Among them, buying and selling NFTs is very popular.

From the Hangzhou court: an NFT is like a pair of trainers

To complete the picture on the status of NFTs in China, a ruling came from the Hangzhou Court, which specialises in internet law. On the 29th of November, the court was called upon to rule on a conflict between a buyer and a marketplace that cancelled a sale of non-fungible tokens without the consent of the parties involved. On this occasion, the court ruled that NFTs belong “to the virtual property of the network” as a unique product protected by an intellectual asset. Non-fungible tokens should therefore, from a legal point of view, be considered as any product sold on an e-commerce website. The law that monitors this is the e-commerce Law, that has come into force since the 1st January 2019. It is a popular law drafted to respond to the rapid growth of online commerce.

Will NFTs become illegal? The latest news does not suggest any particular closures on the part of the Chinese authorities.

Can NFTs exist without cryptocurrencies?

The Chinese government has also proposed its own version of NFTs, i.e. created on the state blockchain. This network, called the Blockchain Services Network (BSN), is a centralised and ‘permissioned‘ blockchain. In contrast to all ‘permissionless’ public blockchains, the BSN is managed by selected employees and not by network validators. On this blockchain, all users are tracked in accordance with Chinese law. Also available on the BSN are tools for artists and brands that want to create their token collections, which can only be purchased in fiat currency. This Chinese version of NFTs is called BSN-DDC or distributed digital certificates.

In China, those who sell or create NFTs do so on the BSN or other similar compliant networks, such as Alibaba, Tencent and JD. Most of these services are offered by established Web2 companies, hardly any decentralised protocols can be found. So can there be NFTs without crypto? Can those proposed by the Chinese government not be considered real, non-fungible tokens? The debate is open, for the champions of decentralisation, ‘distributed digital certificates’ do not meet the needs of Web3.

An instrument of protest

Leaving aside the legislative aspects, NFTs have become popular enough in China to be used as a form of protest against the government.

The citizens of Shanghai last May chose non-fungible tokens as a means of communicating outside China about the oppressive lockdown policies imposed back in March. After the publication of a video against the harsh lockdown, the government had banned all references to the topic on social networks. NFTs then served as a way to bear witness to the difficult living conditions, in a way that was immutable and sharable worldwide.

Even if NFTs become illegal in China, examples like this make us believe that enthusiasts will not give up so easily on a technology with this potential.

Posted on

Quelles sont les 5 meme coins les plus célèbres ?

Que sont les meme coins ? Les 5 plus populaires de Dogecoin à Baby Doge

De Dogecoin a Shiba Inu, en passant par Baby Doge et Dogelon Mars. Qu’est-ce qu’un meme coin et quels sont les 5 plus célèbres ?

Que tu le croies ou non, les meme coins sont un élément important dans le monde immense des cryptos. Ils dominent les phases de bull market, puis disparaissent quasiment pendant les bear markets. Le terme “meme coin” peut être défini comme un néologisme, inventé pour décrire la première crypto née en l’honneur d’un meme : Dogecoin. Il reste à ce jour le plus célèbre,avec le market cap le plus élevé d’entre eux.

Mais quelle est donc la définition d’un meme coin? Ce sont des cryptos nées de memes sur internet, ou d’un épisode irrévérencieux de la culture internet. Le terme “meme coin” est souvent utilisé pour décrire une crypto ayant une connotation parodique, ces projets eux-mêmes se définissent souvent de cette manière. Cependant, les meme coins ne sont pas tous les mêmes. Certains sont nés sous forme de blague et le restent. D’autres parviennent à développer un projet sérieux et consolider leur position. Découvre les différences et caractéristiques communes des 5 meme coins les plus célèbres, de Dogecoin à Baby Doge !

1. Dogecoin

Dogecoin (DOGE) a été créé en 2013 par Jackson Palmer et Billy Markus, basé sur le mécanisme de consensus Proof-of-Work. Après le Bitcoin, c’est la deuxième plus grande crypto PoW en termes de market cap. Le premier meme coin de l’histoire a été inspiré par la célèbre photo représentant un petit chien Shiba Inu (nommé Kabosu) accompagné de phrases courtes et mal écrites en police Comic Sans, une sorte de monologue intérieur du Doge.

Dogecoin est l’un des meme coins qui a “réussi”. Sa feuille de route est très simple et brève, semblant s’inspirer de la façon non grammaticale qu’utilise le chien du meme Doge pour s’exprimer : “utilité -> adoption“. Cette équation signifie que l’objectif de Dogecoin pour l’avenir, et par conséquent aussi l’utilité que l’équipe prévoit de donner à Dogecoin, est l’adoption. Ce processus d’adoption se concrétise avec de grandes entreprises qui choisissent d’accepter le Dogecoin comme moyen de paiement. Parmi ces entreprises figurent AMC, Twitch, Tesla et SpaceX. La notoriété du dogecoin dépend également de sa relation avec celui qui est désormais le propriétaire de Twitter, Elon Musk.

Surnommé “The Dogefather” par la communauté Dogecoin, il a été le premier supporter célèbre du projet qui lui doit une grande partie de son succès. D’une certaine manière, toutes les cryptos créées en l’honneur de nos amis à quatre pattes sont les filles de Musk. Certaines d’entre elles, comme nous le verrons plus tard, lui rendent explicitement hommage.  

2. Shiba Inu

Parmi les cinq meme coins les plus célèbres du monde des cryptos figure bien évidemment Shiba Inu (SHIB). Ce token est né d’une expérience : reproduire le projet de Dogecoin et faire en sorte qu’une autre crypto inspirée d’un petit chien devienne mainstream. Le projet Shiba Inu a été créé en 2020 par un développeur anonyme connu sous le pseudonyme de Rioshy. La crypto de Shiba Inu, SHIB, n’est pas un vrai coin puisqu’elle ne possède pas encore sa propre blockchain. C’est un token ERC-20, construit sur le réseau d’Ethereum. Bien qu’elle soit considérée de manière péjorative comme “just a meme coin”, Shiba Inu a intégré diverses fonctions au fil du temps.

L’écosystème de Shiba Inu est peuplé d’un exchange décentralisé (DEX) avec un AMM (similaire à Uniswap) appelé ShibaSwap, et de deux autres tokens : BONE et LEASH. Le premier est le token de gouvernance qui garantit aux détenteurs de participer aux décisions concernant l’avenir de l’écosystème. Le deuxième est distribué comme récompense à ceux qui mettent leur SHIB en staking sur ShibaSwap. Récemment, l’équipe de Shiba Inu a lancé un jeu pour smartphone appelé Shiba Eternity, qui a rencontré un grand succès, atteignant les premières positions de la section “jeux de cartes” sur l’App Store et le Play Store. Les prochaines étapes pour le deuxième des cinq meme coins les plus populaires prévoient une blockchain de layer 2 qui devrait s’appeler Shibarium ainsi qu’un stablecoin nommé SHI.

3. Dogelon Mars

Un meme coin portant le nom d’Elon Musk ne pouvait évidemment pas manquer de voir le jour. Le token Dogelon Mars, ELON, est l’un des nombreux tokens ERC-20 nés à la suite de la montée en puissance de Dogecoin et de Shiba Inu en 2021 : la meme coin season. L’idée de l’équipe anonyme de Dogelon était de créer une crypto entièrement gérée par sa communauté.

En quoi Dogelon Mars diffère-t-il de tout autre meme coin inspiré par les chiens ? La réponse est une incroyable narration ! Selon le synopsis officiel du projet, en l’an 2420, Mars sera colonisée par la race martienne des Dogelons : des chiens humanoïdes ressemblant vaguement à Elon Musk et dotés d’une intelligence distincte. Dogelon Mars a commencé comme meme coin, mais suite à son succès et à la croissance rapide de la communauté le projet a décidé de développer sa propre feuille de route. Les prochaines étapes envisagent le développement d’un écosystème DeFi, qui permettra de mettre les tokens ELON en staking pour recevoir des récompenses en governance token de l’écosystème : xELON.

4. Baby Doge

Baby Doge a également gagné une place dans la liste des 5 meilleurs meme coins du monde des cryptos. Il s’agit d’un token ERC-20 construit sur la Binance Smart Chain, la blockchain de Binance compatible avec l’EVM. Il se présente comme la “fille” de Dogecoin. La crypto Baby Doge est également née pendant la saison des meme coins de 2021, ayant été conçu comme reward token (c’est-à-dire un token qui récompense automatiquement son propriétaire avec d’autres cryptos). Dans le cas de Baby Doge, les récompenses pour les détenteurs sont payées en Dogecoin. C’est rendu possible grâce à un smart contract qui convertit une partie des cryptos utilisées pour acheter des Baby Doge en Dogecoins, qui sont ensuite redistribués aux détenteurs. L’un des projets de Baby Doge est Baby Doge Swap, un exchange décentralisé (DEX) avec AMM très similaire à PancakeSwap sur lequel il est possible de vendre et d’acheter des tokens construits sur la Binance Smart Chain, ainsi que de mettre des Baby Doge (et d’autre tokens) en staking,

5. Floki

Nous concluons cette liste avec Floki (FLOKI), le dernier des cinq meme coins les plus célèbres. Floki est né suite au tweet d’Elon Musk publié en juin 2021, dans lequel il annonçait à ses followers qu’il avait nommé son nouveau chiot Shiba Inu “Floki“. L’équipe de Floki Inu a très rapidement créé un token ERC-20 portant le nom du chiot nouveau-né, d’abord sur Ethereum, puis sur la Binance Smart Chain. Dans les jours qui ont suivi le lancement,  ils se sont lancés dans une campagne marketing impactante sur les réseaux sociaux, ce qui a permis au projet de gagner un grand nombre d’adeptes. Comme l’indique son site web, Floki veut devenir “la crypto du peuple”. Pour atteindre cet objectif ambitieux, l’équipe collabore avec des plateformes qui encouragent les initiatives caritatives.

Grâce au grand succès rencontré dans les jours qui ont suivi son lancement, le projet a pu travailler sur sa feuille de route, en commençant à développer une série de plateformes et d’applications décentralisées. À ce jour, l’écosystème Floki Inu développe un metaverse “play-to-earn”nommé Valhalla, une carte bleue et une plateforme de staking dédiée.

Outre ceux que nous avons vu, considérés comme les plus célèbres, une avalanche de meme coins a vu le jour. Certains d’entre eux n’ont pas survécu, mais pourquoi ? Les meme coins naissent dans des moments favorables du marché et tentent d’intercepter des récits ou des trend dans le but de toucher le plus grand nombre d’utilisateurs possible. Tous les meme coins, après être devenus populaires, ne parviennent pas à devenir utiles en offrant des solutions attrayantes aux utilisateurs. Pour la prochaine crypto dédiée à un emoji ou au museau d’un chien, attention au FOMO et souviens toi de la règle d’or, DYOR !

Posted on

What is FOMO? Social media and crypto anxiety

What does FOMO really mean? Here are some examples

“Fear Of Missing Out” is one of the most common forms of anxiety of our time. But what does it really mean? Here are some examples from the crypto world

The word FOMO stands for ‘Fear Of Missing Out’. FOMO is the feeling of anxiety that you may experience when you fear that you have missed out on something important. It could be an event, an opportunity or a conversation. With the arrival of social networks, this fear has become more widespead although it has always characterised human behaviour. In other words, FOMO is the constant feeling of being excluded from experiences that everyone else but us is experiencing. The term has also become very popular in the context of trading and cryptocurrencies. In this context, it could involve a fear of missing out on an upward price movement or a potential profit opportunity more generally. In this article, you will find out what FOMO is, its origins and what the term means in the world of crypto! 

What is FOMO? Meaning and origins

The term FOMO was created in 2004 by Patrick J. McGinnis, a Harvard Business School scholar, as part of his research on the social behaviour of first-year university students. From 2010 onwards, psychologists have taken up the concept of FOMO to describe a condition found in individuals who are constant users of social networks. These people, who spend a lot of time observing the lives of others, find themselves obsessively comparing their own experiences with those of others. By constantly comparing themselves, they feel like something is lacking, that they are mistaken or lagging behind in certain aspects of life. Psychologists have described this psychological condition as a constant apprehension that others might have experiences from which the person experiencing FOMO was personally excluded.

Is FOMO just social media anxiety?

The ways in which FOMO manifests itself can be different and vary mainly depending on the intensity of the sensation. You may experience it once in a while during a conversation or more continuously, which may turn this feeling into a real pathology. Suffering from this fear on a continuous basis can cause a worsening of mood, feelings of social inferiority, loneliness and anger.

As we stated before, FOMO became particularly popular after the emergence of social networks. This gave birth to a new culture based on influencers but also everyday friends, who share their dream life online. This can lead people to compare themselves and feel inadequate. Måneskin‘s bass player Victoria De Angelis also spoke about this recently. In an interview with Radio Deejay, she said that she suffers from FOMO, and that she can’t stop going out for fear of missing out on an experience. In fact, the fear of being cut off turns into a schedule full of commitments and hectic days spent chasing experiences. Often without feeling truly satisfied anyway!

You may have just come home from a hard day and you can’t wait to settle down on the couch, but you see all your friends on Instagram getting ready for a concert. If FOMO arrives, your only thought is ‘I can’t stay at home while the most important concert of the year is just a few steps away from me’. You get ready and go out. When the concert is over, the feeling comes back: ‘maybe I could follow my friends to that club and have a drink instead of going to sleep’. In the mildest cases, people in this situation just crawl into bed with some discomfort. For others, the thoughts become obsessive and limiting.

FOMO in the crypto world

In the crypto world and in trading, the meaning of FOMO remains the same. However it applies to missed profit opportunities rather than experiences. People get convinced that they have forever missed the chance to buy the next crypto that will explode. Everyone but themselves is guaranteed stratospheric gains. The venture into the crypto world of a person suffering from crypto FOMO is conditioned by thoughts like “why did I sell at that price?”, “I should have bought more” or “I absolutely cannot miss out this token’s presale”. This psychological condition usually affects those who have recently got interested in the market and who therefore do not have enough experience to know and control their anxiety. These users often buy and sell impulsively for fear of losing a potential profit opportunity.

Those who get caught up in FOMO when approaching the crypto world are engaging in outright fear, and emotions can hinder the pursuit of a rational strategy. Behavioural finance explains how rash actions, triggered by emotional aspects, can negatively affect the achievement of your goals.

Examples of FOMO with cryptocurrencies

To better explain what FOMO is in the context of crypto, we can use some practical examples. The term is for instance particularly appropriate in the case of new crypto launches. These launches always come together with presales that allow those who participate in them to financially support a crypto project before the official launch by purchasing the native cryptocurrencies. One feature of presales is that they have limited access. Only the quickest users to purchase can actually participate in the launch. This aspect generates crypto FOMO in those who want to participate and fear being excluded.

Dogecoin’s bullish movements linked to Elon Musk‘s tweets can also explain crypto FOMO. Every time Musk posts a DOGE-themed tweet, the price of the crypto goes up thanks to so-called FOMO buyers. These people decide to buy DOGE in fear of missing out on the price rise.

The JOMO (Joy of Missing Out)

The opposite psychological phenomenon is JOMO ‘Joy of Missing Out’. JOMO can be defined as the pleasure of enjoying your interests and passions without worrying about the fact that other individuals are pursuing more satisfying activities.

Instead of despairing over untapped crypto opportunities, those who live in the name of crypto JOMO simply disregard them. In fact, the term JOMO is usually used by no-coiners, those who do not hold crypto. While those in the throes of FOMO feel the need to spend hours and hours in front of charts looking for the next opportunity, the JOMO team doesn’t even bother to give it any thought.

Now that you know what FOMO means and how it differs from JOMO, you might ask yourself: which of the two is the best attitude for experiencing the world of crypto? Probably neither, both FOMO and JOMO are extremes. On the one hand we have a tendency to get too emotionally involved, on the other hand we have a tendency to avoid situations completely. Knowing the latest trends and cryptos on the upside, in short ‘being on your toes’ about all the industry news is certainly not a bad thing. So is learning to be more detached like JOMO fans.

Posted on

What are the 5 most famous meme coins?

The 5 most popular meme coins from Dogecoin to Baby Doge

From Dogecoin to Shiba Inu, via Baby Doge and Dogelon Mars. What are meme coins and which are the 5 most famous?

Believe it or not, meme coins are an important component in the huge world of cryptocurrencies. This type of crypto dominates bullish market phases and then almost disappears during bear markets. The term ‘meme coin’ can be defined as a neologism, created to describe the first cryptocurrency born in honour of a meme: Dogecoin. The first meme coin was therefore Dogecoin. To this day, it is still the most famous one and has the highest market cap from all those in our list.

But what is the definition of a meme coin? Meme coins are cryptocurrencies born from internet memes or an episode of internet culture. The term ‘meme coin’ is often used to describe a crypto with a negative connotation, although sometimes projects define themselves purposefully in this manner. However, meme coins are not all the same. Some are created as a joke and remain so, others manage to develop a project and consolidate their position. Discover the differences and common characteristics of the 5 most famous meme coins from Dogecoin to Baby Doge!

1. Dogecoin

Dogecoin (DOGE) was created in 2013 by Jackson Palmer and Billy Markus, and is based on the Proof-of-Work consensus mechanism. After Bitcoin, it is the second largest PoW crypto in terms of market cap. The first meme coin in history was inspired by the famous meme depicting a small Shiba Inu dog (named Kabosu) accompanied by short, broken sentences in Comic Sans, a sort of Doge inner monologue.

Dogecoin is one of those meme coins that ‘made it’. Dogecoin’s roadmap is very simple and brief and also seems to be inspired by the manner Doge expresses himself in broken English: ‘utility -> adoption’. This equation means that Dogecoin’s goal for the future, and consequently the utility the team plans to give to the Dogecoin crypto is adoption. The adoption process is coming to fruition with major companies choosing to accept Dogecoin as a payment method. Among these companies are AMC, Twitch, Tesla and SpaceX. Dogecoin’s fame also depends on its relationship with who is now the owner of Twitter, Elon Musk.

Elon Musk, nicknamed ‘The Dogefather’ by the Dogecoin community, was the first famous supporter of the project. The DOGE crypto owes much of its success to the owner of Twitter. In a way, all the meme coins created in honour of our four-legged friends are Musk’s daughters. Some of them, as we will see later, pay explicit homage to him.  

2. Shiba Inu

Among the five most famous meme coins in the crypto world is undoubtedly Shiba In (SHIB). This meme coin was born from an experiment: to replicate the Dogecoin project and make another crypto inspired by a small dog achieve mainstream status. The Shiba Inu project was created in 2020 by an anonymous developer known by the pseudonym Rioshy. Shiba Inu’s crypto, SHIB is actually not a real coin, since it does not yet have its own blockchain. Instead, it is an ERC-20 token built on the Ethereum network. Although it is derogatorily considered ‘just’ a meme coin, over time, Shiba Inu has been integrating various functions within its ecosystem.

The Shiba Inu ecosystem is populated by a decentralised exchange (DEX) with AMM similar to Uniswap, ShibaSwap, and by two other tokens: BONE and LEASH. The former is the governance token that guarantees holders to participate in decisions about the future of the ecosystem. LEASH is distributed as a reward to those who stake SHIB on ShibaSwap. Recently, the Shiba Inu team also released a smartphone game called Shiba Eternity, which was very successful and reached the top positions of the ‘card games’ section on the App Store and Play Store. The next steps for the second of the 5 most popular meme coins envisage a Layer 2 blockchain that should be called Shibarium, as well as a stablecoin named SHI.

3. Dogelon Mars

A meme coin bearing the name of Elon Musk was not a chance to be missed. The Dogelon Mars token, ELON, is one of many ERC-20 tokens that were created following the rise of Dogecoin and Shiba Inu in 2021, the so-called ‘meme coin season’. The idea of Dogelon’s anonymous team was to create a crypto entirely managed by its community.

How does Dogelon Mars differ from any other meme coin inspired by doggos? The answer is incredible storytelling! According to the project’s official synopsis, in the year 2420, Mars will be colonised by the Dogelon Mars breed : humanoid pooches vaguely resembling Elon Musk and endowed with a distinct intelligence. Dogelon Mars began as a meme coin, but following its success and the rapid growth of the community, it decided to develop its own roadmap. The next steps are the development of a decentralised finance ecosystem (DeFi) that allows the ELON token to be staked in order to receive rewards in the ecosystem’s governance token: xELON.

4. Baby Doge

Baby Doge also earns a place on the list of the crypto world’s top 5 meme coins. It is an ERC-20 token built on the Binance Smart Chain, Binance’s EVM-compatible blockchain. It calls itself the ‘daughter’ of Dogecoin. The Baby Doge crypto was also created during the 2021 meme coin season. Baby Doge was conceived as a reward token, i.e. a token that automatically rewards its owner with other cryptos. In the case of Baby Doge, the rewards for holders are of course paid in Dogecoin. This is possible thanks to a smart contract that converts part of the crypto that users use to buy Baby Doge into Dogecoins, which are then redistributed to the holders. One of Baby Doge’s projects is Baby Doge Swap, a decentralised exchange (DEX) with AMM very similar to PancakeSwap. On this DEX, it is possible to sell and buy tokens built on the Binance Smart Chain and to stake the Baby Doge crypto as well as other tokens.

5. Floki

We conclude our meme coin list with Floki (FLOKI), one of the five most famous meme coins in the crypto world. Floki was created following Elon Musk’s tweet published in June 2021, in which he told his followers that he had named his new Shiba Inu puppy “Floki”. The Floki Inu team was very quick to create an ERC-20 token, first on Ethereum and then also on the Binance Smart Chain, named of course after the newborn puppy. In the days following the launch, Floki’s team embarked on an effective marketing campaign on social networks that allowed the project to gain a large number of followers. Floki, as the website states, wants to become ‘the people’s cryptocurrency’. To achieve this ambitious goal, the Floki team is collaborating with platforms that encourage charitable initiatives.

Thanks to the great success in the days immediately following its launch, the Floki Inu meme coin was able to work on the project’s roadmap, starting to develop a series of decentralised platforms and applications. To date, the Floki Inu ecosystem is working on a play-to-earn metaverse named Valhalla, a debit card and a platform for staking FLOKIs.

In addition to the meme coins we listed, which are considered the most famous, an avalanche of similar cryptos have sprung up. Some of these failed to survive. How come? Meme coins are born in favourable market moments, trying to intercept narratives or trends with the aim of reaching as many users as possible. Not all meme coins manage to become useful and offer appealing solutions to users after becoming popular. When you are considering taking a look at the next crypto dedicated to an emoji or a dog’s snout, watch out for FOMO and as always, DYOR!

Posted on

How to tell if an NFT is rare? A guide to rarity tools!

NFT rarity tools: how to use them and understand if an NFT is rare

What is rarity and how can you find the rarest NFTs in a collection? Find out how to use NFT rarity tools!

When you want to buy an NFT, one of the factors to be assessed is the rarity of the token you’re considering purchasing. This is because rarity influences the value of digital works. Usually, the rarer an NFT is, the more expensive it is. Consequently, if you plan to buy an NFT, knowing its rarity could prove to be a great advantage. The rarity level of an NFT can be measured in various ways according to the type of non-fungible token. For PFP collections and NFTs created by generative art systems, this can be done through tools. These are the so-called NFT rarity tools. Find out how to use them to find out if an NFT is rare!

Where to start when assessing the rarity of an NFT

To understand whether an NFT is rare, you must start by considering the type of non-fungible token. To simplify matters, we can divide them into two main categories: digital art produced by the most innovative and prestigious NFT artists and automatically generated NFT PFPs. Artistic NFTs produced by famous artists, such as those of Beeple or the Italian NFT artist Giuseppe Lo Schiavo, are usually unique copies. Because of this, the rarity of such NFTs is primarily determined by the scarcity of the specific digital work piece. Assessing the rarity of these pieces is complex because there are no objective parameters. It would be like asking how rare Leonardo da Vinci’s ‘La Gioconda’ or Botticelli’s ‘Birth of Venus’ are. In this case, rarity is also determined by the prestige of the artist and the beauty and significance of the work.

How to find out how rare a PFP NFT is

For NFTs that belong to PFP collections or that are generated by random algorithms, rarity is calculated in diverse manners, i.e. statistically. Within a PFP collection, some NFTs are rarer than others and this rarity factor is not solely determined by uniqueness, just like for the works mentioned above. In other words, all PFP NFTs are unique, but not all are rare. In this case, the rarity of an NFT coincides with that of the attributes of which it is composed.

These NFTs are composed of a series of traits or characteristics that are randomly combined. Each NFT has a kind of ‘genetic code’ describing these attributes that is inscribed in the token’s metadata. In fact, the latter contains all the information about an NFT, from its transaction history to its attributes. Each of these attributes has its own rarity percentage.

The rarity percentage expresses the amount of non-fungible tokens that possess this characteristic compared to the total number of NFTs in the collection. Take the Bored Apes Yacht Club collection as an example, which to date contains the most expensive NFTs on the market. Among the various traits in the collection (there are a total of 168) are all the aesthetic characteristics that apes possess. For example, whether the eyes are closed or wide open, the Hawaiian shirt or sailor jacket, the diamond or gold teeth. There are only 49 apes that possess the blue beams eyes trait. Since the total number of NFTs in the Bored Ape Yacht Club is 10,000, the rarity of this trait is 0.49%.

Each trait or characteristic contributes to determining the total rarity of an NFT. By adding up the rarity percentage of each attribute, you can roughly determine the total rarity of the non-fungible token. At this point, it may be useful to learn how to find the rarest NFT in a collection. All major NFT marketplaces, such as OpenSea or Magic Eden, grant users the possibility of a filtered search by characteristic. However, to date, they do not allow a collection to be displayed in order of rarity. To meet this need, NFT rarity tools were developed. Let’s find out how to use NFT rarity tools to find out which is the rarest NFT in your favourite collection.

How does a rarity tool work?

Rarity Tools are software programmes that calculate and rank NFTs according to their rarity. In terms of their programming, they are simple databases in which users can search for specific NFTs and see how rare they are within their collection, as well as the characteristics that contribute to their rarity score. With this information, collectors can easily compare the rarity and value of individual NFTs to make informed purchases. Similarly, those looking for a ‘bargain’ can find the rarest NFTs that are offered for sale at a lower price than those with a similar score.

It is important to note that each platform has its own scoring system, so even if the actual rarity rankings are the same across platforms, the rarity score itself will probably differ. Let’s take a look at the 4 most commonly used rarity tools, and how to use them to find out how rare an NFT is.

The main NFT rarity tools

Some of these rarity tools are free of charge and serve mainly to rank NFTs in order of rarity. Meanwhile, others charge a fee and are built for the ‘professionals’ of buying and selling NFTs. Each has its own particularities and is designed for different needs.

1. Rarity Tools

Rarity Tools is the most widely used free rarity tool for finding the rarest and most expensive NFTs on the market.

Scores vary according to the number of different characteristics each collection possesses, e.g. the rarest Bored Ape was given a score of 333.86 while the rarest NFT Azuki anime collection was given a score of 11,096.

On Rarity Tools, you can also filter NFTs by other characteristics besides rarity, such as average price, total sales volume and number of owners. In short, Rarity Tools is a comprehensive tool for delving into which NFT you might want to buy.

On Rarity Tools, it is also possible to search for a specific NFT in a collection by typing its ID into the search bar, i.e. the identification number of the NFT that is usually preceded by a hash symbol. To find the ID of your NFT, simply go to one of the marketplaces where it can be purchased or consult the blockchain explorer of the network on which the NFT was created. For example etherscan.io for Ethereum and solscan.io for Solana.

In the “upcoming projects” section, Rarity Tools presents some of the projects that are about to be launched. To date, the platform only analyses NFT on the Ethereum and Solana blockchains. NFT prices and volumes are calculated in ETH for all collections. NFT collections that want to be included in the “upcoming projects” section of the platform have to pay a fee of 2 ETH. Rarity Tools also takes into account the value that NFT communities give to specific traits. These special traits are called “derived traits” by Rarity Tools, and NFTs that possess them are granted a higher score.

2. Rarity Sniper

The operation of Rarity Sniper is very similar to that of Rarity Tools. The tool started out as a simple Discord server, which users could join for free. Once logged in, you had to type the ID of your NFT in the chat, preceded by a specially created command. Once the message was sent, a bot was triggered by the command, and would give the NFT’s rarity score to the user. In January 2022, the team that ran the Rarity Sniper server decided to develop its own website, which immediately became an institution in the NFT world, reaching one million visitors in less than a month.  

3. Rarity Sniffer

Another popular free NFT rarity tool is Rarity Sniffer. Compared to Rarity Tools, this tool allows the rarity of each NFT in a collection to be displayed in no time after its creation. Whereas Rarity Tools needs a few days to register projects within its platform, Rarity Sniper manages to calculate the rarity of an NFT within a few minutes from the moment the metadata is revealed, i.e. the moment it is created (or ‘minted’ in Web3 jargon). Unlike Rarity Tools, it is not possible to filter collections by volume or price. Also, on Rarity Sniffer, it is not necessary to pay a fee to enter NFT collections for analysis.

4. Freshdrop

The fourth rarity tool is Freshdrop. This paid rarity tool allows you to find out if an NFT is rare instantly, beating all other rarity tools to the punch. On Freshdrop, you can inspect the rarity of an NFT at the exact moment the metadata is revealed. The rarity tool takes care of sending the user a notification when the metadata is revealed and then ranks the rarest NFTs in a collection. In order to use the service, the “All Access Pass” must be purchased. It is also an NFT, available on OpenSea at a price of about 0.07 ETH.

 

Rare NFTs: not just a question of numbers

We have now seen what is implied by the rarity of an NFT, as well as how to tell if an NFT is rare through rarity tools. It is also at this point necessary to specify that it is not only the statistical rarity of traits that determines how expensive NFTs are. Some traits that possess particular aesthetic and symbolic characteristics can become favourites among the Web3 communities and this consequently brings in value beyond mere statistics. For example, the Bored Apes with the golden fur, numbers #8817 and #3749, which are not statistically the rarest, were the two most expensive sales in the history of the collection. They were sold for $3.4 and $2.9 million respectively.

For other collections, it is not sufficient to use the NFT rarity tools. For example, the CryptoKitties collection by Dapper Labs is not present in any of the rarity tools we have seen above. Could it be because the rarity tools can’t stand kittens? Not really, the reason is related to the complex system of attributes, called ‘Cattributes’, and the genetic combinations through which the collection continually evolves.The CryptoKitties are not made up of a fixed number of non-fungible tokens. The NFT kittens reproduce and as a result, Dapper Labs’ collection grows more and more. By combining these ‘cattributes’, genetic mutations sometimes occur that manifest themselves with traits never seen before. NFTs with these mutations are considered among the rarest of CryptoKitties.

Posted on

Young Monday: NFTs on Uniswap, Brazil and the Phantom Wallet

Phantom crypto wallet coming to Ethereum and Polygon

The Phantom crypto wallet becomes compatible with Ethereum and Polygon, NFTs can now be bought on Uniswap and Brazil legalises crypto

Now that December is here, people are starting to think about Christmas presents. In case you’ve been thinking about gifting an NFT over the last week, you can now also buy one on Uniswap, thanks to its brand new NFT marketplace aggregator. The second news of the week concerns Phantom, Solana‘s main crypto wallet, which is also arriving on the Ethereum and Polygon networks. If, on the other hand, the cold December weather has already tired you out and you are considering moving to Brazil, there is some good news. The South American state has approved a legislative decree on cryptocurrencies!

On Uniswap you can now also buy NFTs!

Since the 30th of November, NFTs have officially arrived on Uniswap. The announcement for the initiative came in June, when the first decentralised exchange (DEX) in history announced the acquisition of the NFT marketplace aggregator Genie. An NFT aggregator is a decentralised application (dapp) that is responsible for showing users different alternatives for purchasing the same token on different trading platforms. Uniswap will gather data from Looksrare, OpenSea, X2Y2, Sudoswap and others that are yet to be announced.

In order to welcome NFT collectors to its platform, Uniswap has decided to apply discounts on gas fees. The first 22,000 wallets to purchase an NFT will benefit from a discount of 0.01 ETH (approximately $10) on their first transaction.

The news about Uniswap and Genie does not end there. Those who used Genie before the 15th of April 2022 (included) could be in line to receive a nice Christmas present. The NFT aggregator plans to distribute an airdrop to its early adopters. 300 USDC will be distributed to those who completed more than one transaction on the NFT aggregator, and 1,000 USDC to those who held a genesis Genie NFT on the 15th April 2022.

Phantom is also ready to integrate Ethereum and Polygon

The Phantom crypto wallet, created in 2021 on Solana, will soon also integrate the Ethereum and Polygon blockchains. Phantom was created by the same developers who started the 0x DEX, with the aim of competing with MetaMask. However, instead of creating a crypto wallet for Ethereum, the Phantom team opted for a nascent ecosystem. The choice fell on Solana, and it can be said to have been a good one. Indeed, the crypto wallet has reached 3 million users in less than two years.

Now, Phantom is finally ready to arrive on Ethereum and Polygon, bringing with it the ease of use that has characterised it since its inception.

One of the upcoming innovations for Phantom, presented by CEO Brandon Millman, is the display of all tokens and cryptos in one screen, even if they are on different blockchains. This could be a very useful function for those who hold the same crypto in different networks and want to have an overall view of their funds. A further improvement for Phantom, again according to Millman, are cross-chain crypto and NFT exchanges from within the same wallet. The feature is being introduced so that users can move their assets from one blockchain to another without having to rely on complicated bridges.

Brazil’s crypto legislation

Brazil has reached a turning point in crypto regulation legislation. The crypto assets bill was voted by the Chamber of Deputies on Tuesday the 29th of November and will shortly arrive on Brazilian President Jair Bolsonaro’s desk, waiting to be signed.

Brazil’s new cryptocurrency law provides for a licence for exchanges wishing to operate in the crypto market. It also stipulates that assets on blockchain that are considered securities will be regulated by the Commission for Securities and Exchanges (CVM), while assets that do not fall into this category will be the responsibility of the Brazilian Central Bank. To better understand the role these state bodies play, you can make a parallel with the US. The Brazilian CVM plays the same role as the Securities and Exchange Commission (SEC), while the Central Bank plays that of the Federal Reserve (FED) of the United States.The adventure of this legislative decree began some time ago, in April 2022 to be precise, when it was approved by the Senate. However, the vote in the Chamber of Deputies took longer than expected due to the discussion of a very topical issue: the way in which exchanges store users’ funds.

Posted on

The story of the CryptoKitties, the NFTs that wrote blockchain history

CryptoKitties: guide and history of NFTs on Flow blockchain

What are CryptoKitties? Who created them? Why did this collection mark the evolution of the blockchain? This and juch more in the NFT guide and history on Flow!

CryptoKitties are a game on blockchain based on the breeding and care of digital kittens in the form of NFTs. In addition to being one of the very first non-strictly financial applications of blockchain, CryptoKitties wrote blockchain history as pioneers of NFTs and gaming on Ethereum. Their success has helped advance the blockchain ecosystem in terms of technology and adoption. But how does the CryptoKitties game work? Who created it? And, how has it influenced the crypto world?

What are CryptoKitties? How can you play with digital kittens?

“Cats are impossible to understand. They are ambassadors of pharaohs, memes and your mother’s Facebook page. They don’t discriminate, they despise everyone equally.” To date, CryptoKitties’ NFT kittens have more than 130,000 wallets involved, 2 million NFTs and a trading volume 70,000 ETH. CryptoKitties are a collection of NFTs depicting cats with different characteristics that need to be bred and fed in order to give birth to kittens. Playing with CryptoKitties means first and foremost collecting, but also becoming expert breeders and scholars of feline genetics, as well as traders doing business by buying and selling the rarest specimens. In addition to this, thanks to the Kitty Verse platform, one can participate in experiences and play games with the CryptoKitties, e.g. by solving riddles and puzzles to unlock new attributes and gadgets, or make the kittens fight each other like in KotoWars. CryptoKitties are now compatible with other digital worlds such as the Decentraland metaverse.

To playCryptoKitties from your desktop, the project team recommends using Chrome or Firefox as a browser for better performance. In the meantime, a mobile app is being developed to keep the NFT Kittties with you at all times! To play, you also need a digital wallet and ETH, the Ethereum crypto that serves to cover the costs of feeding and raising the kittens. Where can you buy CryptoKitties NFTs? They are available on the project’s marketplace (accessible from the website) in the form of direct sales or offers, or in the most widely used NFT marketplaces such as OpenSea. The price of CryptoKitties starts from 0.003 ETH, up to thousands of dollars.

From Ethereum to Flow, the blockchain for NFTs

It can be said that they have come a long way since their launch in 2017, but CryptoKitties have been a success right from the start. The project was launched in 2017 by Axiom Zen, a company dedicated to promoting projects on new technologies such as blockchain. The Axiom Zen team, of which Layne Lafrance was also a member, presented the NFTs at the ETH Waterloo Ethereum hackathon, i.e. an event for programmers gathered to develop new projects or obtain funding. The first NFTs of the CryptoKitties with the Gen0 collection of 50,000 NFTs were soon released on Ethereum. The public reaction was immediately positive, so much so that transactions to buy and play with the kittens increased so much that they congested the Ethereum network, driving gas fees through the roof.

At its peak in 2017, CryptoKitties attracted more than 14,000 active users per day and popularised Ethereum’s technology worldwide. In other words, CryptoKitties helped make Ethereum the benchmark for digital collections and gaming. However, the collection also highlighted some of Ethereum’s weaknesses, and consequently the need for a highly scalable blockchain suitable for hosting games and entertainment. From Axiom’s team in 2018, Dapper Labs ‘The NFT Company’ was founded to build Flow, a blockchain with these characteristics. Starting in 2021, CryptoKitties began a gradual transition from Ethereum to Flow. This change, linked to the reasons for expanding the collection and the game, was designed to improve the project from an aesthetic and technical point of view (by implementing animations, for example) and to make the experience easier for users, even those less used to dealing with blockchain tools. Flow is mainly used in the field of games and social networks, and in general for all those experiences that involve many users simultaneously on the blockchain. Flow intends to manage communities that grow as fast as the Web3 and make blockchain usable for people, and “not just for industry experts and early adopters”. Other popular NFT projects are built on Flow, including NBA Top Shot.

The story of CryptoKitties is the story of the evolution of blockchain

In short, CryptoKitties opened up a need for blockchain scalability, which the industry has now been working on continuously for years. The CryptoKitties crash that sent Ethereum into a tailspin brought a number of innovative solutions to overcome Ethereum’s scalability challenges, as well as Layer 2s that are now essential pillars for network usability. Furthermore, the fact that Dapper Labs created one of the first games on blockchain brought countless new users to the technology, demonstrating the full potential of blockchain in the fields of digital art and gaming. Simply put, CryptoKitties is a pioneer of NFT games and its success pushed the blockchain ecosystem forward in terms of both technology and adoption.

The technology behind CryptoKitties

Each CryptoKitties is an ERC-721 token, the standard for non-fungible tokens. Each CryptoKitties is unique and indivisible and its ownership is tracked thanks to smart contracts. The Core CryptoKitties smart contract tracks all transfers of NFTs and all new ones created through breeding, as well as the attributes and genes that make NFTs different from each other. All actions in the game such as breeding, feeding, selling are transactions performed by smart contracts on the blockchain and therefore require a commission. Since they are NFTs, even if one day Dapper Labs goes bankrupt or the CryptoKitties’ platform gets eliminated, the digital kittens will continue to exist thanks to the blockchain, and so will their value.

Attributes and genetics of CryptoKitties

If there are over 2 million NFTs of CryptoKitties, how do you determine the rarest? By what is their value determined? CryptoKitties, unlike CryptoPunks, for example, are not a limited collection. There is a complex system of attributes, called ‘Cattributes’, and genetic combinations that also inspired the constitution of the little monsters in Axie Infinity, the DeFi video game. To begin with, CryptoKitties are divided into four types: Normal, Fancy, Special Editions and Exclusive. Already, these indicate an increasing scale of rarity because they are available in different quantities.

Each CryptoKitties in turn has a name and 12 attributes such as eye shape and colour, fur type, mouth type, all of which reflect its genetic code. Each attribute consists of a block of 4 genes, a primary one that is the one that manifests itself in the kitten and 3 latent ones. For example, if the fur colour has emerald green as primary gene (P), as hidden genes it can have salmon pink (H1), an orange soda colour (H2) and again orange soda as the third hidden gene (H3). While the primary gene is visible in the NFT, the secondary genes are transmitted to the offspring of CryptoKitties according to different percentages, e.g. the primary genes of the father cat are transmitted in 37.5% of the cases, H1 in 9.4%, H2 in 2.3% and H3 in 0.8%. All kittens can play the role of both father and mother – very modern from CryptoKitties! There is a tool that shows hypothetical kittens and their rarity based on the pairing of the parents. However, CryptoKitties are not always born based on percentages, it can happen that genes mutate creating truly unique and unexpected kittens! Since 2018, Mewtation Gems and Family Jewels, badges to trace and certify the lineage and pedigree of NFTs, have been included.

What is the rarest NFT of CryptoKitties?

A first way of assessing the rarity of CryptoKitties is therefore the type and its genetics; indeed, cattributes have varying degrees of rarity. However, there are other characteristics that do not depend on these aspects, but equally affect the value of NFTs:

  1. Gen0 of CryptoKitties: the first NFTs in 50,000 copies are the rarest and most valuable ever. At the moment, they are not all in circulation, about 12,000 are still owned by the team waiting to be released on special occasions;
  2. “Cooldown” or the resting time between one puppy and another. Each Kitties has a cooldown that depends on its generation, e.g. those from Gen0 have to wait 1 minute to make a new puppy, those from Gen26 onwards, over 1 week;
  3. ID number: NFT cats are numbered according to birth order, so the lower numbers are the oldest CryptoKitties that are sold at higher prices by collectors;
  4. Errors: sometimes newborn CryptoKitties have graphic errors, since mutations are difficult to create they are rarer and particularly hard to find;
  5. Pure-bred kittens: very few specimens have the same gene repeated 4 times in the attribute block.
Posted on

Bear markets in history: 1929 to 2022

A history of bear markets : from the 1929 crisis to the crypto crash of 2022

Do you know about the most important bearish phases in history? What does the crypto bear market of 2022 have in common with past ones?

Following Confucius’ maxim ‘study the past if you want to predict the future’, we are here to analyse past bearish phases with the aim of understanding the dynamics of the bear market we are experiencing now.

If you too are wondering: how long will the 2022 crypto bear market last? Will the price of Bitcoin collapse again? Unfortunately there are no certain answers. However, in this article, you can find information that can help you look at the current state of the market in perspective. For example, we can look at the duration of bearish phases, the elements involved or understand what caused them.

1. The American stock market crash of 1929

The New York Stock Exchange crash of 1929 is the first major crash of a contemporary financial market and the first major crisis caused by free markets and financial speculation. Before the crash of ’29, The United States of America was experiencing one of the most prosperous and economically prosperous periods in history, the so-called ‘Roaring Twenties’. The great economic prosperity of the States seemed unstoppable, made possible by victory in World War I as well as liberal economic policies. However, this economic growth suddenly came to a halt, due to the progressive saturation of the market. Factories closed, products remained unsold and companies began to lay off employees. The crisis of the real economy was reflected on the New York stock exchange through the collapse of the stocks held by both the big capitalists of the time as well as the middle class and small bourgeoisie, who suddenly found themselves without savings.

The real crash came on Thursday 24th October, the infamous Black Thursday. That moment started an intense bear market, nicknamed in retrospect: ‘The Great Depression’. The Great Depression triggered a recession that resulted in a 60% drop in world trade and generated 15 million unemployed people. The Dow Jones, the main US stock index, collapsed by 75% of its value in a few months.

 

2. The ‘dotcom’ bubble

One of the bear markets in history worth mentioning is the one following the ‘dotcom bubble’. The term ‘dotcom bubble‘ is used to describe the phenomenon of unprecedented growth in the share valuations of technology companies, known as ‘dotcoms’, which occurred in the late 1990s. This juncture was characterised by an exponential growth of investments in internet start-ups. It all started with Netscape, the first Internet browser start-up, whose price per share jumped from $28 to $147 in five months. This strong bullish movement brought incredible enthusiasm to the markets, and in particular to the ‘dotcoms’. Alongside Netscape, Yahoo, Amazon and Apple, hundreds of other fledgling companies exploded on the stock exchange.

However, the bubble burst in April 2000, shortly after the all time high (ATH) of the NASDAQ, the stock market index that tracks the prices of the major American technology companies, at 5,048 points. The bubble burst because, in most cases, the dotcoms had no intrinsic value or viable product but were nothing more than aggressive marketing campaigns. This bear market lasted about two years, during which time the NASDAQ index hit 1,111 points, losing more than 75% of its value.

3. The 2008 subprime crisis

The 2008 bear market can be included in the list of major bear markets in history. The economic crisis of 2008 is the one that has most affected our most recent past. Once again, it was the US that started this recession, with the subprime mortgage crisis that erupted at the end of 2006. Subprime mortgages were financial loans granted by major US banks and financial giants, including Chase, JP Morgan and Lehman Brothers to high risk defaulters, i.e. bad debtors. The crisis exploded in September 2008, when the insolvency situation generated by subprime mortgages was combined with a bubble in the housing market. This bubble was the result of accommodative policies by the Federal Reserve (FED), the central bank of the United States. 

The bear market of 2008 did not remain confined to the States but obviously extended to Europe as well. The central banks of the countries found themselves forced to inject huge amounts of money into their economies, through monetary policies of Quantitative Easing, in an attempt to stem the collapse of the global economy. During the 2008 bear market, the S&P 500 (Standard and Poors) stock market index, which tracks the performance of the 500 most capitalised US companies, plummeted 38.5% and the US financial giant Lehman Brothers declared bankruptcy. The bear market of 2008 had a much bigger impact than can be guessed from the charts. The effects of the systemic crisis generated by the bursting of the subprime bubble are still being felt today.

 

4. The first crypto bear market: the Mt. Gox hack in 2014

The first real crypto bear market arrived in 2014. Sure, Bitcoin existed since 2008, but until 2013, it had no real market. The only way to buy it was through peer-to-peer exchanges, and its use was relegated to Dark Web sites like Silk Road. However, from 2013 onwards, the buying and selling of BTC was building a real market, mainly due to the growth of the then largest crypto exchange in the world, MT Gox. It was responsible for processing the majority of Bitcoin transactions worldwide.

This period was characterised by the emergence of many exchanges and wallets and is nicknamed the ‘Hack Era’. Between March 2012 and October 2013, numerous exchanges including Linode, Biconica and Bit floor were hacked. The first hacks did not affect the price of Bitcoin, which continued to rise undaunted. From $5 in March 2012, the price of BTC reached $1,150 in November 2013.

At this point, however, came the first black swan event in crypto history happened: the Mt. Gox hack, through which 850,000 Bitcoins were stolen. This black swan event kicked off the first real crypto bear market that lasted 391 days. From a price of $1,150 BTC reached $150, losing 73% of its value.

5. Bear market 2018: ICOs

The spirit of the crypto market cycle from 2016 to 2019 can be summed up in one acronym: ICOs. The term is an acronym for Initial Coin Offering, and it is the equivalent of initial public offerings in the cryptocurrency world. They are pre-sales of tokens that allow those who participate in them to financially support a crypto project before it is launched, through the purchase of native crypto.

This way of selling to the public was popularised by Ethereum in July 2014. ICOs have been simultaneously the curse and delight of this crypto cycle. On the one hand, they allowed the Web3 world to grow and many projects to find supporters. On the other hand, they generated a major speculative bubble, comparable in the way it inflated to the dotcom bubble. The proliferation of ICOs and the great enthusiasm for this new market allowed for many fraudulent projects to raise huge amounts of money. Due to the global macroeconomic situation, in particular the restrictive monetary policies including Quantitative Tightening, the ICO bubble burst at the end of 2017. This caused the beginning of the bear market. Quantitative Tightening is an abrupt tightening of a state’s monetary policy that results in an increase in interest rates with the aim of limiting inflation.

Bitcoin’s price collapsed from the $19,100 ATH to the $3,200 level, losing 84% of its value. Ethereum fared even worse, as the value of Vitalik Buterin‘s crypto went from $1,400 to around $150, registering a downward movement of -95%. The bottom, i.e. the lowest point reached by a crypto in this cycle, was reached exactly one year after the ATH was reached, on the 17th of December 2018.

6. The crypto bear market of 2022

The particularities of this market cycle are the influence of the COVID-19 pandemic, an event of global magnitude that affected the economy and society, and the entry of institutional investors into the market.

The latter increased speculation, a double-edged sword for all kinds of markets. On the one hand it generates rapid growth, on the other it creates the conditions for an equally rapid descent. This collapse actually occurred on the 12th of May 2021, the day when the price of Bitcoin dropped from around $60,000 to $30,000 in just a few hours. However, this collapse did not signal the start of a bear market as it was reabsorbed in the following months, allowing Bitcoin to reach another high in November 2021. The crypto bear market of 2022 began in the spring, the first catalyst for this bearish phase being the Terra-Luna ecosystem collapse of May 2022. As the months went by, events such as the FED raising interest rates and the failure of the centralised exchange FTX a few weeks ago further fuelled this bear market.

The biggest news in the latest phase of the crypto market, which runs from 2020 to today, concerns adoption. In past bear markets, so-called mass adoption, which was resolved in the number of traditional companies adopting Web3 technologies and the number of users using them, came to an almost complete standstill. The cycle we are currently experiencing seems different. Adoption is continuing despite the conditions of this bear market. An example of this trend is Polygon‘s blockchain, which signed important partnerships with companies outside the world of crypto.

The price differences between the 2018 and 2022 bear markets

So, what are the main differences between this bear market and that of 2018? Let’s look at it from the perspective of the price of the two highest market cap cryptos: Bitcoin and Ethereum. We can start by looking at the price level from which the two bear markets started: in 2018, Bitcoin’s price at ATH was $19,100 while Ethereum’s was around $1,400.

The bearish movement from the highest point reached by the price of Bitcoin to its lowest point in 2018-2019 lasted 364 days, causing BTC and ETH to capitulate at $3,200 and $150, respectively. The price swing was -84% in the case of Bitcoin and -95% in the case of Ethereum.

In the 2022 bear market crypto, the bottom for Bitcoin is for now, is around $15,500. It was reached on the 21st of November 2022, 375 days after the ATH was reached. For the price of Ethereum the situation is somewhat different. The ATH was reached on the 15th of November 2021 but the bottom is located, for now, at around $880, which was reached in July 2022.

Now that you have some information at your disposal, how much longer do you think the 2022 crypto bear market will last? Could the bearish phase have ended a few days ago with the drop to $15,735?

Posted on

Fan tokens explained: what are they and what are they for?

Fan tokens: what are they and how do they work?

Fan tokens are cryptocurrencies created to bring sports teams or artists closer to their supporters and to offer exclusive benefits

In recent years, fan tokens have catapulted a lot of new users into the crypto world, specifically fans of sports teams or music groups. At the moment, these are mainly used in the fields of sports and music, but they can potentially be exploited by anything that involves interaction between a brand and a fan base. Non-sports tokens are also often referred to as ‘social tokens’. In this article, to explain what they are, how they work and what they are used for, we will use the example of the most popular fan tokens : the football tokens on Socios.

What are fan tokens and how do they work?

Fan tokens are a type of cryptocurrency, so in essence they are cryptographic digital coins built on a blockchain. They grant the holder access to a range of benefits or experiences related to the sports team that issues them. The working mechanism of fan tokens is simple: a fan buys them and the team grants rewards such as merchandise, match tickets, experiences with players, and the ability to vote on certain team decisions. Fan tokens were created precisely with the intention of improving and enlivening the relationship between fans and their favourite teams.

So, are they cryptocurrencies like Bitcoin? Technically speaking, fan tokens are created on existing blockchains and use standards developed by third parties. For example if they are based on Ethereum, the standard of reference is ERC-20. In contrast, Bitcoin runs on its own native blockchain. This is precisely why they are ‘tokens’ and not ‘coins’ as in the case of Bitcoin. However, fan tokens share the characteristic of fungibility with Bitcoin. In other words, they are not unique to each other but are interchangeable (so to speak ‘one is as good as the other’). In turn, fungibility differentiates them from NFTs, which are actually an abbreviation of ‘non-fungible tokens’. Fan tokens are therefore not used for collecting.

Are fan tokens utility tokens?

Tokens in the crypto sector are generally classified into utility and security tokens. Utility tokens have a specific utility within the ecosystem that issued them. For example, UNI is the utility token of the Uniswap decentralised exchange, which is used to participate in project governance. On the other hand, security tokens promise a future profit to their holder. In what category do fan tokens fit?

According to the Chiliz team, which actually launched the first tokens of this kind on the Socios platform, they are neither utility tokens nor security tokens. Fan tokens constitute a ‘third’ and new token with specific characteristics, which emerged from the need to unite fans and teams with Web3 tools.

Where can you buy them?

Fan tokens can be bought from platforms that issue them, such as Socios on the Chiliz blockchain. To buy fan tokens on Socios you need to sign up and buy $CHZ. In exchange for this crypto, you then can get your team’s fan tokens. Fan tokens are bought like any other cryptocurrency. Once the purchase is complete, you will find the fan tokens directly in your wallet. In some cases, fan tokens are listed in crypto exchanges.

What can you do with fan tokens?

Fan tokens were created to increase the participation of fans in the events of their team. With them, football clubs can offer direct involvement, making the relationship with fans reciprocal.

Why is this needed to bring fans closer together? As Alexandre Dreyfus, CEO of Chiliz and Socios says, 99.9 percent of fans don’t even go to the stadium. Teams therefore need channels to interact with the entire fan base, not just those who can physically go to the games.

What are fan tokens actually used for? Let’s look at a few examples. Holders can choose how to decorate the team’s dressing room with motivational phrases, or the motto on the captain’s armband (as in the case of F.C. Barcelona). Or, decide the song with which to celebrate anniversaries or the design of the kits (in the case of Inter). Napoli fans these days are voting on the new name for the team’s training ground.

As the owners of the Udinese fan token prepare to redeem their Christmas dinner.

Fan tokens are mainly bought by fans. On the other hand, like all other cryptocurrencies, they can be used by traders for buying and selling transactions. The market for fan tokens has proven to be very much linked to the performance of matches as was evident in the case of the 2022 World Cup and national team fan tokens.

Now that you know what fan tokens are, how they work and what they are used for, you may be wondering what their true value is within the crypto landscape, but also within the sports landscape. Their relevance depends on the importance given to fan tokens. If a team sees its fans only as people who go to games, fan tokens do not seem so interesting. When, on the other hand, fans are the lifeblood of the entire football club, fan tokens are a tool for building relationships and sharing sporting enthusiasm.