DeFi Scams: The Most Common Scams in the DeFi Space

Audy Castañeda
-
0
DeFi Scams: The Most Common Scams in the DeFi Space

Unfortunately, in the world of DeFi, scams are very common.

Decentralized finance (DeFi) is a term that has gained enormous popularity over the years. DeFi is the shift from centralized financial systems to peer-to-peer finance enabled by decentralized technologies built on the Ethereum Blockchain.

DeFi promises a more equitable and accessible financial system, but it is still largely unregulated. The lack of regulation has made DeFi a haven for fraudsters, who have looted millions from unsuspecting consumers.

We can summarize a typical scam in three steps:

  1. The scammer creates a fake project or impersonates an existing one.
  2. The scammer promotes the fake project or impersonates the existing one to generate interest and attract users.
  3. The scammer exits the scam, leaving users with worthless tokens or no access to their funds.

Most Common Types of DeFi Scams

Phishing Scams: The most common type of phishing scam in the DeFi space is phishing. This is when a scammer creates a fake website or social media account that looks identical to a legitimate one. They will then use this fake account to try to trick users into sending them money or personal information. Another common type of DeFi scam is the Ponzi scheme. Instead of investing the money, the scammer pays the previous investors.

Scams involving false or stolen identities: Someone uses your personal information to register a new account or access an existing one. They may also use your information to apply for credit cards or loans or to make purchases on your behalf. Another way identity theft can occur is when someone steals your private key or recovery phrase, giving you access to accounts and allowing unauthorized changes or funds to be sent.

Forgery and Fake Digital Assets: This scam usually occurs when someone creates a website or social media account that looks identical to a legitimate project. However, the page has minor changes that allow the scammer to redirect funds to your wallet.

Fraudulent activities associated with initial coin offerings (ICOs): In an OIC, a company offers digital tokens for investors’ fiat currency or cryptocurrency. However, many ICOs are scams, as companies use the funds raised to enrich themselves instead of developing the project. A serious fraud associated with ICOs is when the team behind the project absconds with the funds. This type of fraud is technically an “exit scam.”

How to Protect Yourself from DeFi Scams

At this point, you are probably wondering how you can protect yourself from falling for one of these scams. Below are some tips.

  1. Do your research.
  2. Don’t invest more than you can afford to lose.
  3. Beware of scams on social networks.
  4. Be careful what links you click and what information you trust.
  5. Find projects with KYC and audit certifications.

In addition to losing your money, scams in the DeFi sector have several adverse effects on the industry. For example, it undermines trust in decentralized financial protocols and offers free marketing to scammers.

When a user falls for a scam, not only the investor loses money. The entire DeFi industry is negatively affected by it.

To conclude, the best way to protect yourself from DeFi scams is to educate yourself and stay on top of the latest scams. Understanding how these scams work can help you protect yourself and your hard-earned money.

By Audy Castaneda

Experts Consider XRP Might Trade at USD 3.81 by 2025 If Ripple Labs Defeats the SEC

Alexander Salazar
-
0
Experts Consider XRP Might Trade at USD 3.81 by 2025 If Ripple Labs Defeats the SEC

If Ripple loses the lawsuit, the price of XRP might trade at USD 0.98, still an advantage for those HODLing. Martin Froehler, the CEO of Morpher, thinks it is time to buy as the crypto industry would benefit if the company defeats the SEC.

Amid the legal battle between Ripple Labs and the SEC, XRP is trading at around USD 0.47. In that context, the group of in-industry specialists Finder panel makes further predictions about cryptocurrencies.

The experts recently talked about what might happen to the price of XRP if Ripple Labs wins the case. They said the crypto asset might trade at USD 3.81 by the end of 2025.

If the company loses the lawsuit, the price of XRP might be USD 0.98, an advantage for those ready to HODL. However, nobody knows what will happen to the cryptocurrency until the release of the outcome of the case in 2023.

An Adjusted Prediction about the Price of XRP

The specialists’ predictions about the XRP price have decreased since April. At the time, their average forecast was USD 2.55 by December if Ripple Labs won the case. If the company loses the lawsuit against the SEC, they expected the price would be USD 0.68.

The decline in riskier assets affected the value of XRP, as has happened with most cryptocurrencies. The October 2022 forecast by the panel is about 64% below their prediction in April.

Craig Cobb, a representative of Tradercobb.com, believes that XRP will trade at USD 1 by late 2022 if they make a profit. He said a herd mentality might drive the price higher.

Predictions about the XRP Price amid the Crypto Winter

According to Mitesh Shah, the CEO of Omnia Markets, the price of XRP might settle at USD 0.25 if Ripple Labs wins. He argued that controversial coins like XRP would have a negative impact as global traders capitulate their investments.

Sathvik Vishwanath, the CEO of Unocoin Technologies, does not foresee a significant rise in the price by late 2022. He thinks the price of XRP will be USD 0.54 if Ripple Labs wins and USD 0.50 if it loses.

Vishwanath pointed out that XRP has enough supporters as it has responded well to price action across the market.

Tommy Honan, the head of strategic partnerships at Swyftx, believes that XRP will follow market trends until the verdict. He stated that there might be increased volatility when the outcome looks closer, as the market usually assesses those events in advance.

Honan predicts that the price of XRP might rise to USD 0.75 by late 2022 if XRP wins and USD 0.35 if it loses.

The Experts Talk about Buying, Selling, and HODLing XRP

Only 27% of the specialists stated they buy XRP, while 38% HODL and 36% sell.

According to Martin Froehler, the CEO of Morpher, it is an excellent time to buy. He explained that the crypto industry would benefit significantly if Ripple Labs wins the case. The bullish prediction of the expert is USD 5 by 2025 if the company defeats the SEC.

John Hawkins, a senior lecturer at the University of Canberra, considers it is time to sell. He said that XRP has no fundamental value, so it mostly follows the price of Bitcoin (BTC).

Meanwhile, XRP is trading at around USD 0.47and has accumulated a 3.9% loss over the last 24 hours. While its daily trading volume is above USD 1.31 billion, its market capitalization is about USD 23.31 billion, according to CoinGecko.

By Alexander Salazar

Amid High Volatility, the Price of ETH Recovers after Dropping below USD 1,200

Alexander Salazar
-
0
Amid High Volatility, the Price of ETH Recovers after Dropping below USD 1,200

A high correlation between ETH and BTC and a spot price below the 200-day MA suggest the dominance of bearish sentiment. The buying side of derivatives has fallen in the macro trend since mid-July, so any recovery in the short term may fail.

After struggling to defend its USD 1,200 level for a long time, Ether (ETH) dropped briefly before rallying to USD 1,343. That price action highlights the relevance of demand for the second-largest cryptocurrency below support at USD 1,200.

Daily Technical Analysis of the Price of Ether

The recently announced Crypto Price Index (CPI) for September 2022 caused volatility in the crypto market. However, it has recovered, taking Ether to the 200-week moving average again. Considering the 61.8% Fibonacci level at USD 1,210, it might be crucial to defend that level.

Amid a bearish trend, the probability of correction will continue if the price of Ether drops below USD 1,200 again. While the market struggles with that level, the number of buy orders will increase and weaken buyers. The price might test the psychological USD 1,000 level if that level fails.

In addition, negative sentiment will decrease if the price reclaims the horizontal level at USD 1,400. In that context, the value of Ether might also end the ongoing bearish trend soon.

There has been a high correlation between Ether and Bitcoin over the last 23 days. The spot price is trading below the 200-day moving average (MA), suggesting the dominance of bearish sentiment in the market. Besides, the range between 0.0645 BTC and 0.0663 BTC seems to be a significant support area. If Ether drops below, the market may experience another correction, leading to additional support at around 0.06 BTC.

Sentiment Analysis of the Price of Ether

The 14-day simple moving average (SMA) is the ratio of the purchase volume divided by the sales volume. Values ​​above 1 indicate the dominance of bullish sentiment, while values ​​below 1 show the prominence of bearish sentiment.

Data from CryptoQuant indicate buyers usually execute sell orders since the index is below 1. That metric rose above that level briefly in early October, but the buyers could not maintain positive momentum.

According to a chart, the buying side of derivatives market buyers has fallen in the macro trend since mid-July. Therefore, recovery in the short term might fail until the direction of the macro trend changes direction.

Ether is trading at around USD 1,285 and has accumulated a 0.4% gain over the last 24 hours. While its daily trading volume is above USD 5.72 billion, its market capitalization is about USD 154.59 billion, according to CoinGecko.

Investors should research cryptocurrencies like Ether before buying them to know their all-time high, behavior, and possible future price. That will allow them to find the most convenient investment opportunity to minimize the risk of losing their money. It is a matter of time before seeing how the market influences the price of the second-largest cryptocurrency.

By Alexander Salazar

Brazil’s CVM Publishes Whitepaper on Crypto Market Regulation

Audy Castañeda
-
0
Brazil’s CVM Publishes Whitepaper on Crypto Market Regulation

The Brazilian Securities and Exchange Commission (CVM) published a series of guidelines on the cryptoactive market.

The Securities and Exchange Commission (CVM) published Guidance Opinion 40, which consolidates the understanding of the rules applicable to crypto assets considered as securities.

The document also presents the limits of action of the regulator, indicating the possible ways to regulate, inspect, supervise and sanction market agents.

“The opinion is a recommendation and market orientation, with the aim of guaranteeing greater predictability and security for all, in addition to contributing to the protection of investors and popular savings, as well as promoting a favorable environment for the development of the crypto economy, with integrity and adherence to the relevant constitutional and legal principles”, says the president of the CVM, João Pedro Nascimento.

With this ruling, the CVM seeks greater transparency in relation to cryptos, in addition to assessing the information disclosure regime.

Nascimento highlights that the municipality has followed and participated in various discussions on the current demand for regulation of cryptocurrencies in Brazil, including Bill 4401, which is pending in the Legislative. If approved by the Chamber of Deputies, the next step is the presidential sanction.

“The CVM is attentive to the regulator’s area of ​​competence and, when the time comes, will work on the appropriate regulation – as regards the capital market”, adds Nascimento.

Cryptoactives and Tokenization

The municipality is attentive to the global scenario and recognizes that the regulation of crypto assets is a cross-border challenge and requires guidance. Therefore, it is interested in providing information on the Brazilian capital market.

According to the document, the tokenization itself is not subject to prior approval or registration with the CVM. However, the issuers and the public offer of said tokens will be subject to the applicable regulations, as well as the administration of the organized market for the issuance and negotiation of tokens that are securities, as well as for intermediation, bookkeeping, custody, deposit centralized, registration, clearing and settlement of operations.

Characterization of Crypto Assets as Securities

Although crypto assets are not explicitly included among the values ​​mentioned in the articles of art. 2 of Law 6,385, Guidance Opinion 40 indicates that market agents must analyze the characteristics of each cryptoactive, in order to determine if it is a security.

This occurs when it is the digital representation of one of the expected values, ​​or falls within the open concept of value provided by law.

The CVM will identify the type of token to indicate its legal treatment. Initially, payment token, utility token, or asset-referenced token formats will be accepted, a class that includes non-fungible tokens (NFTs).

The entity reinforces that, “it remains attentive to the marginal market of crypto assets that are securities, and will adopt the appropriate legal measures to prevent and sanction any violation of the laws and regulations of the Brazilian securities market.”

Thus, they contribute “to investor protection and popular savings; prevention and fight against money laundering, prevention and fight against corruption; control of tax evasion; and the prevention and fight against the financing of terrorism and/or proliferation of mass destruction weapons.”

The CVM concludes the document by stating that, “it will continue to deepen the study and analysis of the subject and its application to the capital market, being able, if necessary and appropriate, to regulate this new market, even in light of its ‘experience’ with the Normative Sandbox.”

By Audy Castaneda

Lex Friedman Believes Satoshi Nakamoto Deserves the Nobel Prize for Creating Bitcoin

Alexander Salazar
-
0
Lex Friedman Believes Satoshi Nakamoto Deserves the Nobel Prize for Creating Bitcoin

The Bitcoin protocol is the first in history that has made it possible to create and sustain a decentralized monetary system. While fiat currencies inevitably tend to depreciate and favor spending over time, BTC may be an excellent means of saving.

Lex Friedman, a research scientist at the Massachusetts Institute of Technology, proposed ​​awarding a Nobel Prize to Satoshi Nakamoto. Michael Saylor, the co-founder of MicroStrategy, and many other people responded to his idea with optimism.

It would be technically impossible to award an anonymous or deceased person a Nobel Prize. However, there could be posthumous official recognition of the inventor of Bitcoin as the proposal has solid foundations.

Although Satoshi Nakamoto has not moved any BTC since 2011, many believe he might still be alive. Others think that a group is behind the pseudonym, but two hypotheses lead to Hal Finney and Dave Kleiman, who are dead.

Some Consider the Work of Nakamoto Deserves the Nobel Prize

The idea would be to award the Nobel Prize in economics to Nakamoto, as Bitcoin resembles a mathematical study of global finance.

The Bitcoin protocol is the first in human history that has made it possible to create and sustain a decentralized monetary system.

Although Bitcoin does not have a single source of reliable information, the data related to the transactions in its blockchain is reliable.

Besides being impossible to counterfeit, Bitcoin allows users to verify the accuracy of transactions autonomously without depending on intermediaries.

The Idea of Creating Bitcoin Emerges as a Financial Revolution

The idea of Satoshi Nakamoto behind the creation of Bitcoin is revolutionary from a financial point of view. Those who issue and manage fiat currencies may produce them in arbitrary amounts, weakening their value.

A currency with a fixed supply or prone to deflation might cause some problems as a means of payment. However, combining it with traditional fiat currencies with variable and arbitrary supply may offer advantages.

Central banks can create as much money as they want, although it leads to the rise of inflation. Although Bitcoin may not be a practical means of payment, it can be an excellent means of saving. Meanwhile, fiat currencies inevitably tend to lose value over time, favoring spending.

Therefore, many believe that Satoshi Nakamoto would be worthy of receiving a Nobel Prize for inventing the first alternative to traditional fiat currencies.

Since it is impossible to award the Nobel Prize to him, it would be convenient to imagine another type of recognition. In addition, it is difficult to argue that the creator of the pioneering cryptocurrency does not deserve to receive it.

Nakamoto created a technology that gave life to a financial asset that marked the start of a new era. In 2009, the value of BTC was zero, but it began trading in fiat currency in mid-2010 before Satoshi disappeared.

Bitcoin is trading at around USD 19,128 and has accumulated a 0.4% gain over the last 24 hours. While its daily trading volume is above USD 12.88 billion, its market capitalization is about USD 366.90 billion, according to CoinGeccko.

By Alexander Salazar

Magic Eden Updates to Maintain Dominance over Solana NFTs

Audy Castañeda
-
0
Magic Eden Updates to Maintain Dominance over Solana NFTs

Magic Eden’s dominance over Solana NFT has faced increased competition from rivals.

Magic Eden, a Solana-based NFT marketplace, revealed it would switch to an optional royalty model and said it would waive the 2% platform fee, effective October 14.

The new optional incentive model allows the buyer to determine the number of royalties they will pay. While all collections will pay full royalties by default, buyers have the option to decide if and how much to pay.

Magic Eden wrote that their “fundamental reason for changing royalty payments to the buyer is to make sure the buyer fully understands if they are going to receive the benefits that creators provide (Discord, participation, etc.).”

On Twitter, @MagicEden posted that, “After some difficult reflection and discussions with many creators, we’ve decided to move to optional royalties on @MagicEden. Effective later today, we will also begin running a promotion to waive our platform fees.”

The NFT marketplace admitted that the decision was not an easy one. Still, the changing dynamics of the marketplace forced his hand. The Web 3.0 company added that it would launch a $1 million creator monetization hackathon. The initiative will focus on developing new ways for creators to monetize their works on the platform.

Magic Eden: Solana NFT Marketplace Optional Royalties

Recently, Solana-based NFT marketplaces like X2Y2, Yawww, and Solanart launched platforms that allow users to trade NFTs without paying royalties. In addition to these marketplaces, other NFT projects, such as DeGods, have also introduced the concept of 0% royalties in the marketplace.

A tweet by @MagicEden on October 9th announced that, “the metadata for the DeGods collection royalties are being updated from 9.99% to 0%.”

The move has divided the community, with some showing support for the new model that Magic Eden, Solana’s NFT marketplace, wants to implement, while others have criticized it for its treatment of creators.

Magic Eden reacted by posting a tweet claiming that, “After some difficult reflection and discussions with many creators, we’ve decided to move to optional royalties on @MagicEden. Effective later today, we will also begin running a promotion to waive our platform fees.”

Magic Eden revealed that NFT marketplaces with this optional royalty model had seen an increase in the number of wallets interacting with their platform.

Two of a series of tweets posted by Magic Eden on October 14th explained the situation further:

“The market has been shifting towards optional creator royalties for a while. These charts show the cumulative wallets that have used optional royalty marketplaces to buy or sell NFTs.”

“We have actively been trying to avoid this outcome and spent the last few weeks exploring different alternatives. Unfortunately, royalties are not enforceable on a protocol level, so we have had to adapt to shifting market dynamics.”

Solana NFT Marketplace Status

Magic Eden’s dominance of the Solana marketplace appears to be waning in light of the latest developments in the space. According to Tiexo data, Magic Eden controlled 89% of Solana NFT market volumes six months ago. But that figure has lately dropped to 69%.

Meanwhile, NFT marketplaces with optional royalty models like Solanart saw their volume increase from 1.66% to 6.62%.

Despite the progress made by these platforms, data from DappRadar shows that the number of unique active wallets interacting with Magic Eden increased by 37.52% in the last 30 days. Solana’s marketplace also processed 22.24 million.

By Audy Castaneda

1...637638639...1,654Page 638 of 1,654