Tag: financial crypto

Decentralized Finance Is on The Rise What You Need To Know in 2021

Few had heard much about decentralized finance (DeFi) in its early days in late 2017 and late 2019, beyond murmurs about Bitcoin and a mysterious new digital technology called blockchain. 

But a pandemic can change everything. 

Since May of this year, the total value locked (TVL)—the amount of any currency locked into tokens, the vehicle of holding and moving assets on blockchain, in smart contracts on a blockchain ecosystem—in decentralized finance projects rose a whopping 2,000 percent, according to DeFi Pulse. Many investors would be hard-pressed to find such an astronomical rise of any assets or expansion of any financial ecosystem, but DeFi app developers seemed to find success. So what’s the rage, and why does it matter going into the new year? 

What is DeFi?

DeFi, many fintech leaders argue, is the world’s answer to the 2008 financial crisis. Thanks to poor decision making and a lack of proper financial regulation, legacy financial institutions brought the world’s economy to its knees in the most major financial crisis since the Great Depression. The knee-jerk reaction was to create an ecosystem dependent on every link in the chain, rather than centralized authorities—hence the term “decentralized finance.”

The concept of blockchain, a decentralized ledger, was designed to ensure financial transactions would be transparent. Moreover, transaction approval would come from network individuals incentivized to approve them by solving complex mathematical equations or by network consensus voting. 

Later, the idea of operating a decentralized financial system on a decentralized ledger, independent of legacy institutions, grew into a thriving, albeit relatively small, ecosystem. Now, users can find financial services on the distributed ledger for loans, insurance, margin trading, exchanges, and yield farming (yielding rewards from staking digital assets on a network to help facilitate network liquidity).

But there is still a way to go. Not enough consumers are comfortable with DeFi quite yet, because platform accessibility and blockchain tribalism remain a problem. Nevertheless, now the world is experiencing another economic crisis brought on by the COVID-19 pandemic, and DeFi is finally getting its day in the sun.

Related: Getting Drawn Into DeFi? Here Are Three Major Considerations

E-wallets are leveling up

For companies and individuals already active in the space, navigating the ecosystem remains impeded by technical limitations. In order to access certain markets and execute transactions on the blockchain—whether it’s borrowing or lending, staking assets in liquidity pools, or trading on an exchange—users need to own an e-wallet that’s properly connected to the ecosystem. 

E-wallets are the backbone of transactions on blockchain. Just as the digital assets they help transact and store, these wallets are secure, transparent, and easily accessible to users. At least, that’s the idea behind them, though there are various degrees of security and transparency. For DeFi to attract more users, the wallets must be compatible with multiple blockchains running financial dApps (decentralized apps that operate on a blockchain system). One of the first wallets, created by Ethereum and called “MyEtherWallet” (MEW), lacked a user-friendly interface and was challenging to grasp for people outside the hardcore crypto crowd.

Since then, a number of blockchain developers have created alternative e-wallet solutions. Most recently, Spielworks, a blockchain gaming startup, reached an agreement with Equilibrium and DeFiBox to integrate its e-wallet “Wombat,” which is currently available on the Telos and EOS blockchain mainnet (a blockchain network that is fully developed, deployed, and operational).

The Wombat wallet provides users with access to several DeFi platforms that offer token exchanges, yield farming, borrowing, and lending. Wombat recently also integrated with Bitfinex’s new EOS exchange, Eosfinex, as well as 8 other DeFi networks. Rather impressively, the wallet also offers free and fast account creation, automatic key backup, and free blockchain resources. 

Related: Cryptocurrency Innovators Need to Simplify User Experience

Developments in blockchain wallets, such as Wombat’s, will be pivotal in the next few years in the growth of DeFi applications and the movement of users toward decentralized finance and away from traditional finance. While wallets are important, so are the underlying mechanisms to piece the entire ecosystem together, because one a DeFi ecosystem is not enough if confined to just one blockchain mainnet.

Piecing it all together

“A house divided against itself cannot stand.” President Lincoln’s famous quote referred to the Civil War that ravaged the United States at the time, but his historically renowned words can apply very well to the blockchain community today. 

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For DeFi to reach its maximum potential, as a decentralized ecosystem that doesn’t answer to a central authority, blockchain platforms must stand united and interoperate. Could anyone imagine if payment transfers between regular banks were not possible? How could an economy function? This is the sort of technical problem plaguing the DeFi world: Each blockchain platform has its own benefits, but each remains largely separated from the others in its own silo. The root of the problem is attitude, the other part is technical limitations.

Related: 15 Crazy and Surprising Ways People Are Using Blockchain

Ethereum and EOS are primary examples of this sort of rivalry, both of which have their own technical benefits for dApp developers. If the two ecosystems could be connected to one another, EOS-based and Ethereum-based developers alike, for example, could benefit from each other’s platform’s strengths. Users could also benefit, via financial opportunities without having to sacrifice shifting their base from one blockchain to another.

This is precisely what LiquidApps’s latest development—its DAPP Network bridging—has solved. LiquidApps’s technology provides the technical mechanisms to connect separate blockchain mainnets and recently provided its tools to EOS-based developers to successfully deploy a bridge between EOS and Ethereum.

This was shortly followed by decentralized social media app Yup’s deployment that demonstrated the possibility of moving tokens easily between different once-separate blockchain mainnets. It still remains to be seen how long it will take before blockchain platforms themselves integrate built-in cross-chain technologies, but LiquidApps is starting the next crucial step to DeFi development.

Whether it’s cross-chain technology or the e-wallets that grant access to dApps, tech developments and attitudes in the DeFi space over the next few years will determine its success. The latest developments suggest the future of DeFi looks promising. Time to go decentralized.

By: Ariel Shapira Entrepreneur Leadership Network Contributor

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Paris Fintech Forum

by O. Bussmann, CEO, Bussmann Advisory (CH) Speakers *M. Froehler, CEO, Morpher (AT) *H. Gebbing, Managing Director, Finoa (DE) *U. Shtybel, Vice president, HighCastle (UK) *N. Filali, Head of Blockchain Program, Caisse des Dépôts (FR) more on http://www.parisfintechforum.com/videos2020

99Bitcoins

Start trading Bitcoin and cryptocurrency here: http://bit.ly/2Vptr2X DeFi applications – https://defipulse.com/defi-list/ DeFi is becoming more and more popular as the main use case for cryptocurrencies. This video explains in detail what DeFi is and what you should know about before getting involved. 0:38 Bitcoin and Our Financial System 1:24 Our Centralized Financial System 1:59 What is DeFi? 2:22 DeFi Components 4:16 – DAI explained 5:51 – DEXs explained 6:33 – Decentralized money markets 8:06 Money Legos 8:56 DeFi Advantages and Risks 10:02 Conclusion For the complete text guide visit: https://bit.ly/2R35g6Z Join our 7-day Bitcoin crash course absolutely free: http://bit.ly/2pB4X5B Learn ANYTHING about Bitcoin and cryptocurrencies on our YouTube channel: http://bit.ly/2BVbxeF Get the latest news and prices on your phone: iOS – https://apple.co/2yf02LJ Android – http://bit.ly/2NrMVw2

Your Financial Year-End Checklist

2020 is over, and for many of you, it can’t end soon enough. There will be plenty of time to celebrate the end of one year and to hope for better days in the one ahead. But before we get to that, take these steps to get financially ready for 2021.

1) Review your goals: The end of the year is a great time to review the goals you made at the beginning of the year and set new ones for 2021. How did you do this year? Is there anything you’re proud of accomplishing? I like to start with bright spots because they can guide you toward success as you set new goals. But let’s be realistic, too; 2020 threw us a lot of curveballs.

Was there anything you wish you could have done better? You can also learn from any potential stumbling blocks and figure out how to use them as stepping-stones next year. You may also want to take time now to review your net worth. That’s one way to gauge the progress you’ve made in your financial health this year.

2) Update your budget: Did you save the money that you wanted to? Pay off the debt that you needed to? The end of the year gives you a solid end point to assess whether met the goals you set at the outset of 2020. What if you didn’t have a budget or financial goals? You’ve got a blank slate ahead. Why not create a budget that works? 

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3) Create a holiday bucket: Holidays can be budget breakers, so why not incorporate them into your spending goals right from the start? Christmas may look a lot different this year. But you can still create a separate bucket for holiday spending and when that money is gone, stop spending. You’ll thank yourself in January when you don’t have an unusually large credit card bill.

4) Use it or lose it: Some of your benefits—like vacation days or a medical or dependent care flexible spending account (FSA)—expire at the end of the year. Take stock of what you have left and use these benefits to your advantage. MORE FOR YOUPPP Loan Forgiveness Application Guidance For The Self-Employed, Freelancers And ContractorsSBA Approving Economic Injury Disaster Loans (EIDLs): What You Need To KnowWhat You Can Do Now To Maximize Paycheck Protection Loan Forgiveness

5) Make any last charitable contributions: December 31st is the last day your charitable contributions can be deducted on your 2020 tax return. If giving to charity is a part of your spending plan, you can use these questions to help make the most of your charitable giving.

6) Pump up your 529: Just like charitable contributions, contributions to your 529 college savings plan must be made by December 31st to count for this tax year. Find out if your state is one of over 30 that allow you to deduct your contribution. You can find the specific deduction here. If your state is one of the four that allow an unlimited deduction, keep in mind the yearly gift-tax and super-funding rules.

7) Max out your 401k: While you have until April to make contributions to your traditional IRA, Roth IRA and HSA, you can only contribute to your 401k through December 31st. So, if you have extra cash and are looking to boost your savings, consider contributing your last couple of checks entirely to your 401k. Business owners can do the same with the employee portion of your Solo 401k contributions.

8) Find your tax return: You’ll be doing your taxes before you know it, so use this time to get prepared. Review last year’s return and make a mental list of records you’ll need to assemble. Year-end is also a good time to decide whether a Roth conversion makes sense for you.

9) Review your business structure: Evaluate your business structure and the QBI deduction to identify any changes you need to make to your business. You might want to set up a solo 401k, for instance, and if so, you’ll have to act before December 31st (although you can make employer/profit sharing contributions up to the business tax filing deadline).

10) Defer income and incur expenses: If you’re a business owner, you may also want to look at ways to defer income into 2021 or pay for business expenses you anticipate for early next year. This is any easy way to reduce your tax liability for 2020. However, remember not to spend money on business expenses that you wouldn’t otherwise incur just for a tax deduction. Spending a $1 to save 24 cents still costs you 76 cents.

 11) Will and trust review: The end of the year is a good time to take stock of changes in your life—like getting married or divorced, having children, starting a business or retiring.  Your estate plan should reflect these changes. Get out your will, documentation for trusts you’ve established and powers of attorney and make sure they match your current situation.

12) Insurance documents: Insurance documents also need to cover your current situation. Take a look at your life and disability insurance policies to make sure they protect your current income and those dependent on it. Your renters or homeowners insurance should cover any additional big purchases you made during the year. And lastly, you should review your health insurance policy for any upcoming changes for 2020. For those of you enrolling in the Market Place, you have until December 15th to pick your plan.

genesis-2-1

My last bonus task is to enjoy this holiday season. I love the holidays because you can reflect and appreciate what you have. We’ve been tested a lot this year, living our lives through a pandemic, racial unrest and a contentious election. I hope the end of the year brings you comfort and peace. Follow me on Twitter or LinkedIn. Check out my website. 

Brian Thompson

Brian Thompson

As both a tax attorney and a CERTIFIED FINANCIAL PLANNER™, I provide comprehensive financial planning to LGBTQ entrepreneurs who run mission-driven businesses. I hold a special place in my heart for small-business owners. I spent a decade defending them against the IRS as a tax attorney and have become one as a financial advisor. It’s a position filled with hope and opportunity. It gives you the most flexibility to create the life that you want. I also understand the added stresses of running a business while being a person of color and a part of the LGBTQ community. You may feel like you don’t have access to the knowledge that others do. I’m here to help lift some of that weight from your shoulders.

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Critics:

A personal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.

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Financial Advisory Firm Says Past Market Trends Point to Bitcoin at $20,000 by 2021

Financial advisory firm Canaccord Genuity has predicted that bitcoin (BTC) could hit $20,000 by 2021 based on retrospective projections in an analysis published on May 9.

This prediction is based on a close similarity between the four-year price cycles of bitcoin during the 2011–2015 and 2015–2019 ranges, as shown in the following graph:

Bitcoin price cycles. Source: Canaccord Genuity

Canaccord Genuity points to the bitcoin mining rewards schedule as a possible cause for these four-year price cycles, since the reward drop — which decreases by 50% for every 210,000 blocks mined — has so-far occurred about once every four years. However, the report cautions:

“As always, we caveat this observation with the obvious — this is simply pattern recognition and not reliable fundamental analysis.”

Canaccord Genuity analyst Michael Graham commented on cryptocurrency prices at the beginning of 2018, saying that the upswing in regulatory enforcement would likely have a major impact on the crypto market via dislocation (therefore making it hard for crypto assets to be accurately priced).

Earlier this week, Galaxy Digital Founder and CEO Michael Novogratz predicted that the price of bitcoin would exceed $20,000 by the end of 2020. Novogratz did not provide a specific rationale for his conviction, but did note that bitcoin is in a bull market and is outperforming the price growth of other cryptocurrencies.

At press time, bitcoin is trading at $6,404.55 and is trending up by 4.89% on the day, according to data from CoinMarketCap.

Source: Financial Advisory Firm Says Past Market Trends Point to Bitcoin at $20,000 by 2021

South Korean financial watchdog sticks to the decision of banning ICO

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A new update has emerged from the South Korean financial authority, the Financial Services Commission (FSC). The financial regulatory decided to maintain the ban enforced towards ICOs, based on the findings of the Financial Supervisory Service (FSS). Started September last year, the FSS conducted a survey to 22 enterprises in the country that had launched ICOs, on which they only received feedbacks from 13 of them………..

Source: South Korean financial watchdog sticks to the decision of banning ICO

Wyoming ‘financial technology sandbox’ bill seeks to boost blockchain and fintech innovation – TokenPost

A bill has been introduced in Wyoming’s state legislature to establish financial technology sandbox in order to boost innovation in this space. Introduced last week, the “Financial Technology Sandbox Act” seeks to create a financial technology sandbox for the testing of financial products and services in the state of Wyoming.

Source: Wyoming ‘financial technology sandbox’ bill seeks to boost blockchain and fintech innovation – TokenPost

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