DEXs, MinSwap and MuesliSwap, currently have $30 million and $6.5 million worth of liquidity locked in them respectively On Thursday, COTI Network, the issuer of the Cardano-backed stablecoin Djed announced its upcoming listing on major DEXs MinSwap and Muesliswap. COTI also added that Shen, its reserve coin, would be on that listing. MuesliSwap to List DJED and SHEN On Thursday afternoon, COTI retweeted the MuesliSwap announcement that revealed the exchange’s plan to list $Djed and $Shen in the coming…
How Crypto Validators Validate Transactions?
Crypto validators, also known as “stakers,” are individuals or entities that hold and validate transactions on a blockchain network. They do this by putting up a stake, or a deposit of cryptocurrency, as collateral to participate in the validation process.
The validation process is typically done through a consensus mechanism, such as proof-of-stake or delegation, to ensure the integrity of the blockchain. In return for their validation services, validators typically receive rewards from transaction fees and a new cryptocurrency.
Types of Crypto Validators
There are several types of validators in blockchain networks, each with unique characteristics.
- Full validators: These validators hold a full copy of the blockchain ledger and validate all transactions. They are also responsible for creating new blocks. They are generally considered to be the most secure type of validator.
- Light validators: These validators do not hold a full copy of the blockchain ledger but still validate transactions and help to create new blocks. They rely on full validators to provide them with the necessary information.
- Non-validating nodes: These nodes do not validate transactions or create new blocks, but they are still important for the network as they help to propagate transactions and blocks throughout the network.
- Delegated validators: These validators are chosen by token holders to represent them in the validation process. They are often used in delegated proof-of-stake (DPos) consensus mechanisms.
- Cold validators: These validators are only sometimes online; they come online only to validate and sign the blocks and then go offline.
- Hot validators: These validators are always online and actively validate and sign blocks.
Different blockchain networks may have different variations of validators, and the specific role of validators may vary depending on the consensus mechanism and design of the network.
Crypto Validators Benefits and Drawbacks
Benefits of crypto validators:
- Decentralization: Validators help to distribute power and control over the network, making it more resilient to attacks and failures.
- Security: By validating transactions and blocks, validators help ensure the blockchain network’s integrity and security.
- Earn rewards: Validators can earn rewards for their validation services through transaction fees and a new cryptocurrency.
- Help to keep the network running: Validators help to keep the blockchain network running smoothly by validating and propagating transactions and blocks.
Drawbacks of crypto validators:
- Requires a significant amount of resources: Becoming a validator typically requires a significant amount of resources, such as hardware, bandwidth, and energy.
- High barriers to entry: The resources required to become a validator can make it difficult for small or individual participants to enter the market.
- Risk of loss of stake: If a validator behaves maliciously or is hacked, they risk losing their stake, which can be a significant financial loss.
- Risk of 51% attack: If a group of validators controls more than 51% of the network’s total stake, they could launch a 51% attack and manipulate it.
- Risk of becoming a target for hackers: Since validators hold a large amount of cryptocurrency, they may become targets for hackers looking to steal their assets.
What Are DeFi Lending Platforms?
Decentralized finance (DeFi) lending platforms are decentralized applications (dApps) built on blockchain technology that enable users to borrow and lend cryptocurrency. These platforms use smart contracts to automate the lending process, eliminating the need for intermediaries such as banks. Here's an example of how a DeFi lending platform might work: Alice wants to borrow 100 ETH, so she goes to a DeFi lending platform and posts a request for a loan. Bob, who has 100 ETH to lend, sees Alice's…
What is The Capital Gains Tax in Crypto?
Cryptocurrency capital gains tax is the tax imposed on the profit made from the sale or exchange of a cryptocurrency. The tax rate for capital gains can vary depending on the country or jurisdiction. Still, in the United States, it is typically calculated as the difference between the cryptocurrency's purchase price (or cost basis) and the sale price multiplied by the individual's marginal tax rate. In some countries like the US, you only need to pay the capital gains tax…
Cryptocurrency vs. FIAT Money
Cryptocurrency is a digital or virtual currency that uses cryptography for security. It operates independently of a central bank or government. Bitcoin, the first and most widely used cryptocurrency, was created in 2009. FIAT money, on the other hand, is a currency a government has declared legal tender, but a physical commodity (such as gold) does not back it. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material…
Short-Term vs. Long-Term Crypto Investors
Short-term crypto investors typically buy and sell digital assets within a short time, often within a few hours or days. They are often driven by market fluctuations and aim to make quick profits. Long-term crypto investors hold onto their assets for longer, often for several months or years. As a result, they often believe in the technology and potential of the digital asset they are investing in and need to be more focused on short-term market movements. Short-Term vs. Long-Term…
What Are Bitcoin Maximalists?
Bitcoin Maximalists believe that Bitcoin is the only true cryptocurrency and that all other cryptocurrencies are inferior or unnecessary. Therefore, they often advocate for using and adopting only Bitcoin and reject the idea of diversifying one's cryptocurrency portfolio with other coins or tokens. Bitcoin Maximalists are known for their strong belief in the value and potential of Bitcoin as a decentralized and scarce digital asset. They often view it as a store of value or hedge against traditional fiat currencies…
Coins vs. Tokens: What Are the Differences and Similarities?
Crypto coins and tokens are digital assets that use blockchain technology, but they have some key differences. A crypto coin, like Bitcoin or Litecoin, is a standalone digital currency used to buy goods and services or traded on cryptocurrency exchanges. Coins have their blockchain and can be mined (created by solving complex mathematical equations) or minted through staking. On the other hand, a token is a digital asset built on top of an existing blockchain, like Ethereum or BNB Chain.…
What Are Overbought and Oversold Conditions in Crypto Trading?
Overbought and oversold conditions in crypto trading refer to situations where the price of a cryptocurrency has moved to an extreme level in one direction or the other. An overbought condition occurs when the price of a cryptocurrency has risen significantly and is considered too high relative to its recent trading history. This can indicate that the market is becoming too bullish and that the price may soon experience a correction. An oversold condition occurs when the price of a…
What is Crypto Tokenomics?
Crypto tokenomics refers to the economic principles and mechanisms that govern the creation, distribution, and use of tokens within a blockchain-based network. A token is a digital asset that can be traded on blockchain platforms and represents a certain value or utility within a specific ecosystem. For example, consider a decentralized application (dApp) built on the Ethereum blockchain. The dApp might issue its token, let's call it "APP," which can be used to access certain features or services within the…
What Are Gold-Backed Tokens?
Gold-backed tokens are digital assets backed by a physical asset, in this case, gold. They are typically issued by a company that holds a certain amount of gold in reserve. The company will issue certain tokens representing a specific amount of gold. For example, one token might represent one gram of gold. These tokens can be bought and sold on various cryptocurrency exchanges, similar to how other cryptocurrencies, such as Bitcoin, can be traded. The token's value is tied to…