August Monthly Report and Defi is Exploding
Alexander Barry | Tue Sep 01 2020
Decentralized Exchanges are booming!
Uniswap has been breaking records as the largest decentralized exchange ever!
Daily volume on August 1st was close to $100,000,000 USD, today on the 31st it has passed $500,000,000. Uniswap allows for decentralized swap transactions of ERC20 tokens on the Ethereum blockchain. This allows for anybody to create a token to begin trading it without the need for a centralized exchange listing. In the past decentralized exchanges such as EtherDelta used order books, which uniswap does not have. Instead of an order book, uniswap uses liquidity pools where users deposit both token they would like to provide liquidity for, and an equal value of Ethereum. The user can trade any token by specifying the amount of ETH they would like to spend, or the number of tokens they would like to buy, and the uniswap contract automatically calculates the rate the entire trade will take place at. This is a big upgrade from decentralized exchanges in the past that were limited by cumbersome user interfaces that required orderbooks to be on-chain. Uniswap has effectively lowered the barrier of entry for the exchange of new tokens directly on the Ethereum network, without the need for centralized exchanges to list them.
YAM
One token that was able to rise to prominence thanks to Uniswap trading was the meme coin YAM. The peak Total Value Locked (TVL) of Ethereum in the YAM Smart-Contract at one point exceeded $750,000,000. The gas fee increase on that day caused Ethereum's fees to pass Bitcoin's fees for the first time ever. Unfortunately the YAM smart contract was not designed to hold such a large amount of Ethereum, and the rebase function controlling the issuance of new YAM tokens minted several orders of magnitude more YAMs than originally planned. This excessive minting of new tokens broke the governance model of YAM, the creators declared YAM dead because the smart contract was deemed unfixable, however they promised to return with YAMv2. The price tanked from $140 to $0.39, and everybody was able to withdraw their Ethereum out of the contract.
YAM v2 is now out, and is priced at $27 with a total supply of 3,726,411 and market cap of over $100,000,000 with $15,000,000 trading volume today, of which $7,000,000 was from Uniswap.
Polkadot
Designed to be an interoperability chain, to allow non custodial decentralized trading of cryptocurrencies across multiple different blockchains.
Polkaswap is a non custodial AMM DEX designed uniquely for the Polkadot ecosystem and the interoperable future.
Polkaswap launch: the team is aiming for q4 2020-q1 2021, but no promises as security and quality are main priorities.
Swap and Liquidity Pools using CLI
Bitcoin tested $12,000 earlier this month, hitting a high of $12,400 before correcting slightly, it is $11,725 at the time of writing.
It was a tremendous month for many altcoins. Chainlink climbed the rankings to become the 5 highest marketcap cryptocurrency going up 84% in August. Kava was the monthly star going up 358%. OMG Network was up 202%. Other top gainers include: REN +200%, Aragon +198%, STORJ +191% , NEM +189% SingularityNET +171% Fantom +170% Enigma +161% Numeraire +160% Orchid +142% Reserve Rights +140%
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None of this is meant to be financial advice and I do not have any financial expertise.
Full discloser: I do own Bitcoin and buy/sell other cryptos.