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Golden Observation | You should have a firm belief in DeFi derivatives



It is not necessary for you to obtain all the information in the crypto circle, it is impossible to achieve, and usually you will miss the next big rise, so in the ever-changing market of the currency circle, this investment method is not feasible. Is there any other feasible way to invest? You need to establish a firm belief in a certain investment product. The following will introduce why you should establish a firm belief in DeFi derivatives. The reason is that in the traditional financial market, the derivatives market is the largest. It is difficult to calculate the size of the derivatives market, but you need to know that it is a huge market, about 100 times the size of the global money supply. But interestingly, the opposite is happening in DeFi now. The total amount of the cryptocurrency market is in the trillions, and the supply of currencies such as ETH, BTC, and USDC accounts for a considerable part of the market. However, derivatives are one of the smallest markets in the crypto ecosystem. So will this change? This article will delve into this aspect. The skyrocketing currency price is not a smooth process, but decentralized derivatives can achieve substantial growth steadily. People often criticize the PoW consensus for wasting a lot of resources. But have you ever thought that in order to get all the news on the Twitter coin circle, so as not to miss the next 100 times coins, the brains of crypto investors will also consume a lot of energy? Golden Evening News | List of important news on the evening of July 31: 12:00-21:00 Keywords: Filecoin, India, BitShares, ETH2.0, Ripple, USDT additional issuance 1. Official Filecoin: It will be launched on August 12 at the latest Testnet rewards program. 2. India’s Ministry of Economic Affairs confirmed that the cryptocurrency bill is awaiting government approval. 3. Bitcoin options worth $745 million will expire on August 1st. 4. 20% of the DEX trading volume on the Ethereum network comes from DeFi aggregators. 5. The core developer of BitShares changed the voting rules without the consent of the community, causing controversy. 6. Ripple legal team: Unable to prove that Ripple's bullish statement on XRP misled investors. 7. MyEtherWallet founder: It will take a few years to realize ETH 2.0. 8. In the past seven days, Tether has printed 5 new banknotes, totaling 810 million USDT. 9. 40% of the market circulation of the stable currency DAI has been pledged into the YFII No. 2 pool. [2020/7/31] You may wake up in the middle of the night to Elon Musk’s tweet about Dogecoin, only to find that the big rise happened 10 minutes ago, which will make you feel stressed, frustrated and anxious. It's not good for your health. Golden Evening News | A list of today’s important developments: 1. Huo Xuewen, director of the Beijing Financial Bureau: Beijing will focus on exploring regulatory sandboxes in two regions 2. Qu Shuangshi of the State Council: Stablecoins with specific issuers and anchored to certain collateral may become real 3. Yu Weiwen, President of the Hong Kong Monetary Authority: Blockchain can solve some "persistent" problems of banks 4. Xi'an Branch of the People's Bank of China uses the advantages of blockchain technology to significantly improve the bank's risk control capabilities 5. US Secretary of the Treasury: The Federal Reserve will not issue digital currency within 5 years and does not oppose Facebook's issuance of Libra 6. Chengdu Qingyang Financial Intelligent Trial Platform introduces a blockchain depository system 7. Vice Chairman of the Libra project: Libra Association is determined to be authorized next year 8. "Create with the times" golden Over 400,000 votes on the financial annual list 9. 11 South Korean companies including Samsung Electronics will provide blockchain-based mobile identification and authentication services 10. In the past two years, venture capital has invested more than 205 million US dollars in stable currency projects[ 2019/12/6] What if there are other investment options? In a parallel world, instead of racking their brains for financial advice on TikTok, crypto investors maintain a very relaxed state of mind. Just like the transition from Ethereum to PoS, what if you could be a better version of yourself? Imagine that although you are in the currency circle, you can use the minimum effort to obtain the maximum return on investment. Golden Morning News | The IRS issued another warning to cryptocurrency users Barclays Bank and the Coinbase exchange terminated cooperation: 1. The US Internal Revenue Service (IRS) once again issued a warning to cryptocurrency users. 2. Luxembourg financial regulator: Cryptocurrency-related companies are not authorized to operate in the country. 3. The Attorney General of Maryland, USA announced that he will crack down on counterfeit cryptocurrency transactions. 4. Santander Bank in the UK does not allow its customers to deposit with Coinbase. 5. The US SEC sued the New Zealand blockchain company SimplyVital Health.Inc for issuing unregistered securities. 6. Binance KYC information was broadcast live again, and the hacker and Binance negotiation records were fully exposed. 7. U.S. Department of Treasury Foreign Investment Control Office: Regulating the cryptocurrency industry will be our top priority. 8. The Supreme People's Court builds a unified blockchain platform, and the ant blockchain provides the underlying technology. 9. Barclays Bank terminated cooperation with Coinbase Exchange Coinbase sought Clearbank Bank as an alternative. [2019/8/15] Now there is good news, this can be achieved! You just need to build firm faith! Analysis | Golden Disk: The DASH channel is running, short-term focus on changes in trading volume: Comprehensive analysis of the golden disk: The daily chart shows that the K-line shape is a converging triangle. The popularity accumulated in the previous wave of promotion depends on whether it can become the main force of the bulls this time. Investors should view market fluctuations rationally and do a good job in risk control. [2018/9/17] There are stories behind all good investment theories. The following is a story about a plantation farmer near Chicago in the 19th century. At that time, the costs of running a farm, such as labor, seeds, and tools, were largely predictable, whereas market prices for crops were unpredictable. Not only is the harvest variable from year to year, but it can take several months from planting to selling the harvested crops, which creates great uncertainty for farmers. Similarly, if you mined a lot of $CAKE tokens in BSC, and when you were about to sell them, someone urged you to return to Uniswap L2, then the $CAKE tokens are now worthless. In fact, speculating on crop price fluctuations was never something farmers should be doing. , The Chicago Board of Trade was established on April 3, 1848. On the exchange, farmers are finally able to find a counterparty, a speculator, who agrees to buy a crop that will be harvested in a few months at today's prices, and the farmer is effectively able to pass the risk of volatility on to the speculator. Analysis | Golden disk: BTC/USD 30-minute trend: Golden disk comprehensive analysis: BTC/USD oscillated in an ascending channel for 30 minutes. Pay attention to changes in trading volume. [2018/8/13] At first, farmers and speculators negotiated different contracts, but after a while, exchanges started to roll out standard contracts. With the standardization of contracts, different contracts can also be traded with each other. As a result, a big problem was born, and it was born soon. Finally, 169 years later, the Ethereum derivatives contract was launched on the Chicago Mercantile Exchange. The following will summarize the major innovations brought about by derivatives contracts: 1. Leverage Under the condition of high capital efficiency, even with a small amount of assets, you can do a lot of operations. Typically, the more capital efficient the better. Leverage allows traders to do more operations with fewer assets, greatly improving capital efficiency. Traders can use leverage in two ways, either by borrowing additional assets from others or by trading on an account with margin and liquidation features. Derivatives exchanges all have the function of monitoring margin and forced liquidation. For example, a trader with $1,000 in his account can purchase contracts worth $100,000 with 100x leverage. If the price fluctuates by 1% in the opposite direction of the contract, the forced liquidation will automatically start, effectively closing the trader's $100,000 position and transferring the $1,000 in the account to the counterparty. On the other hand, if the price moves in the direction of the contract, the trader will receive 100% gain, which is equivalent to $1,000. He can earn a profit of 100% of the principal through a 1% price change. 2. Before the short-selling derivatives contract was born, investors had to predict that a certain asset would depreciate, so that they could borrow the asset from others, sell it in the spot market, wait for the price to fall, and then repurchase and repay the asset to earn the difference. This is A very tedious process. However, based on the design of the derivative product itself, the contract can already be shorted. For each derivatives contract to be traded, one party to the contract must be long and the other must be short. After shorting assets becomes simple, many operations can be performed to achieve various purposes. For traders, one use is hedging against stocks of commodities, such as wheat and soybeans. When the underlying asset appreciates, the short position will depreciate, and when the underlying asset depreciates, the position will increase in value, which can fix the total value of the underlying at the time of opening. 3. Trade any underlying asset Derivatives contracts can be based on almost any underlying asset, as long as the asset can be priced. It also allows investors to easily gain exposure to assets without having to think about asset storage. Simply put, people can now bet on crude oil prices even without tankers. But those contract values don't necessarily come from physical assets. The outcome of a presidential election, market volatility or interest rates can all be the value of a contract. In view of the above advantages, almost none of us can resist the attraction of derivatives trading, and derivatives have quickly become the largest financial market in the world. The size of the derivatives market is difficult to calculate, but if you compare it to the global money supply, the derivatives market is estimated to be 100 times larger. But this huge market is about to be hit by decentralized derivatives. Not because derivatives traders care about its decentralized properties, but because it brings real added value. Compared with centralized derivatives, decentralized derivatives have three obvious advantages, namely, no need for custody, trustless and auditable. We’ve already seen lending protocols like AAVE or COMPOUND start to eat up the lending market in both traditional and centralized finance. It is only a matter of time before the same thing happens in the derivatives market. Now let's make a second assumption, what if the proportion in the DeFi market is finally the same as in centralized finance? We will get ETH, USDT and other currency supply markets that will be 10 times smaller than AAVE, COMPOUND and other lending markets , 10 times smaller than the decentralized derivatives market. But what is interesting is that the situation in the DeFi market today is completely opposite. I firmly believe that DeFi will swallow traditional finance, and the market share of the two will eventually be the same. This is my firm belief in DeFi, which shows the huge growth potential of decentralized derivatives. I want to emphasize again that anyone can join the derivatives market and make huge profits steadily. Before buying decentralized derivatives exchange tokens, I would like to give you a piece of advice that you should understand the main differences between the following three types of derivatives, namely futures, perpetual contracts, options, and synthetic assets. Although some agreements may have more than one kind of derivatives, I think it is more important to focus on developing a certain kind of derivatives and do the best to gain traction and chances of winning market share before moving on to other types of derivatives Taste. FTX, Binance Futures, and Deribit have all proven this to be true, with futures and perpetual contracts also dominating in terms of trading volume, everything points to the same trend happening in the DeFi space as well. This is why I am more bullish on exchanges like dYdX or MCDEX that specialize in futures and perpetual contracts. Why haven't the public discovered the advantages of derivatives? First, there was a time when only fairly experienced traders dabbled in derivatives. Thankfully, Binance Futures has driven the popularity of derivatives among retail investors, and people are now more familiar with derivatives and therefore able to understand the principles behind them. Second, the inner workings of derivatives exchanges are much more complex than spot exchanges. Coupled with the cost of Gas fees running on Ethereum, for developers and users, the threshold for accessing derivatives is very high. Now that some Layer 2 solutions have been launched, such as Starkware, and some other solutions are coming soon, such as Arbitrum and Optimism, metrics for measuring decentralized derivatives exchanges such as trading volume and locked positions will soon come into play. History will prove that decentralized derivatives will eventually succeed.


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