https://www.coingecko.com/learn/crypto-index-fund

What Are Crypto Index Funds?

Crypto index funds are investments in a specific crypto index, and are designed to offer investors access to a diversified basket of crypto assets.The performance of a crypto index fund will mirror closely the performance of the crypto index it tracks. 

Key Takeaways

• A crypto index tracks the performance of selected cryptocurrencies. It is considered as an insight into the performance of related assets or assets in a similar category.

• Crypto index funds give investors exposure to a basket of cryptocurrencies at once as opposed to investing singly in each of them.

• When choosing a crypto index fund, considerations include the total assets under management, fund composition and methodology, and historical returns.

With over ten thousand cryptocurrencies listed on asset tracker like CoinGecko, it is rare to find traders who invest in only one of these assets. Many traders adopt a diversified portfolio approach, spreading their investments across different assets based on their research and personal convictions. However, instead of deciding which crypto assets to invest in by yourself and how much to invest in each asset, crypto index funds offer an easier way to invest in an assortment of crypto assets at once. 

Understanding Crypto Index Funds

A crypto index is a selection of different cryptocurrencies and a parameter to gauge their performance over time. Put simply, a crypto index selects a basket of cryptocurrencies and tracks their performance. For instance, a crypto index could track the performance of the top 20 cryptocurrencies.

As a crypto index fund tracks and trades an index, it is an investment fund that diversifies capital across a selected index. Through crypto index funds, an investor can invest in these tracked assets all at once. For example, a crypto index fund for the top 20 cryptocurrencies would let an investor invest in these 20 crypto assets at once, with the amount per asset decided by the fund. Ultimately, crypto index funds attempt to limit risk and possibly maximize profits by buying a portion of different assets at a strategic proportion.

Index funds are not unique to cryptocurrencies; these are common in the tradfi investment space as well. Stock market indices like FTSE 100 measure the performance of 100 blue-chip companies listed on the London Stock Exchange, where an FTSE 100 index fund would spread investors’ funds across these 100 companies.

How Do Crypto Index Funds Work?

Crypto index funds implement professional approaches to the regular diversification done by everyday investors. Instead of randomly buying a bunch of crypto assets, crypto index funds track selected crypto assets and channel investors’ capital into these. On the investor’s end, a one-time investment is made while the index fund management proceeds to split the capital across the different crypto assets in their index.

Crypto indices are weighted in different ways, just like stock market indices. 

Some crypto indices are weighted according to market capitalization, where such crypto indices compute the market capitalization of the different crypto assets they are composed of and split their investments across these assets relative to their market capitalization.  

Other crypto indices are weighted according to price. Price-weighted crypto indices compute the prices of their component assets and diversify their capital based on the value. That is, they may opt to channel more capital to the asset with the highest or lowest price. The index then tracks this price as the known performance of that particular index.

The index fund now proceeds to compute a share value which represents the cost of stake on the assets held and the profits generated. The share price could fluctuate as the performance of the index fluctuates. This price is presented just like the price of a crypto asset – for instance, the Bitwise 10 crypto fund index has a market price of $18.34 at the time of writing, where an investor who commits $18.34 to the index fund buys one share of the tracked assets. Therefore, this investment is automatically diversified and managed by Bitwise.

Managing a crypto index fund involves decision-making as regards which assets are added to the index or removed. It also involves re-balancing the weights of the assets to generate or maintain profit.

Benefits Of Crypto Index Funds

For the regular investor, crypto index funds could be a good approach to investing in cryptocurrency. Here are some of the advantages of investing in cryptocurrencies through crypto index funds:

Diversification

While every investment comes with pronounced risks, cryptocurrencies are one of the most volatile assets known, where the value of crypto assets fluctuates more than usual. Crypto index funds help investors spread their capital across different assets in order to tame the volatility risk of crypto.

With a diversified portfolio, some assets’ positive fluctuation can cushion the negative fluctuation of the other assets in the same index. When compared against buying a single asset, diversification, especially through crypto index funds, could be less profitable when the poorly performing asset reduces the profits generated from the well-performing asset. However, this could also make it a more profitable approach in cases where the singly-held asset performs badly, as the other assets in the basket may be less impacted by market forces.

Professional Fund Management

Most crypto index funds claim to employ the services of experienced investors, traders, accountants, and administrators who understand how the crypto space works and are experts in weighted diversification. This creates a team of dedicated professionals who manage users’ funds, as opposed to managing your funds by yourself. Also, with the crypto index fund operators managing these investments, they save investors a load of researching, tracking and handling their investments, which could be tedious at times.

Liquidity

By helping investors diversify their portfolios, crypto index funds ensure that many other crypto assets get a share of the capital that flows into the space. 

For investors, crypto index funds present an easy way to buy and sell cryptocurrencies. They increase the accessibility of crypto assets and in doing such, invite more funds to the space. Instead of working through different centralized and decentralized exchanges to purchase different cryptocurrencies, an investor could simply invest in an index fund that tracks the asset (or a majority of the assets) they wish to purchase. This simplified capital flow creates more markets for crypto assets.

Disadvantages And Risks Of Crypto Index Funds

In spite of these advantages, crypto index funds also have some shortcomings. Here are some of the disadvantages of investing in cryptocurrency through crypto index funds:

Lack Of Control

Investing through crypto index funds is a trust-based process where an investor entrusts the index fund operator with their capital. The success of this investment depends majorly on how well the operators manage the investments, which is out of the investors’ control. 

In a case where the operator is not adequately knowledgeable about the space, the lack of control over your investment can result in losses. In addition, running a crypto index fund also involves managing different crypto assets which are markedly different in the way they operate and even their regulatory landscape. This exposes the index fund’s performance to rapid changes in these areas which could have a significant impact on the performance.

Lack Of Liquidity

Liquidity for the different assets in a crypto index also differs, therefore, the ease of buying and selling these assets also varies for the fund manager. If some or all of the assets in an index have poor liquidity, this could pose a challenge for the index fund operator in processes such as rebalancing or making complete sales and purchases. The slippage caused by the low liquidity could affect the overall performance of the crypto index fund. As a precaution, verify the liquidity conditions of the assets in the crypto index you wish to invest in.

Location

While crypto index funds make it easier to invest in a range of crypto assets, some cryptocurrency index funds aren’t available to investors everywhere in the world. There could be geographical restrictions on the operations of certain crypto index funds or deliberate exclusion of certain locations by the index funds operator. 

It is therefore advised that investors do adequate research on the geographical availability of their desired crypto index fund.

How To Choose An Index Fund

Before deciding which crypto index fund to invest in, here are some factors you should consider:

Asset Under Management (AUM)

AUM is a record of the value of assets controlled by the index fund, showing the amount of investor capital entrusted to the fund. A reputable index fund should have a significant AUM, as many investors trust it with their funds. 

These statistics can also be used to provide insights into the performance of the fund. One way is to track the growth of the AUM as a measure of investor activities as it concerns the index fund. A consistently decreasing AUM could be a show of investors’ dissatisfaction and investors pulling away, or it could also mean that the value of the assets in the index’s portfolio is dropping. Either way, this signals the need for more in-depth research on the index fund. Meanwhile, a consistently increasing AUM is generally a show of health for an index fund.

Composition

Index funds track selected assets. Sometimes these assets are connected by certain metrics (like top 20 cryptocurrencies). At other times, these assets are selected based on other criteria by the index fund. In either case, investors’ conviction or orientation about these assets might differ. Therefore, before investing in an index fund, check out the composition of the index fund, and do your own research on the individual assets as much as possible before investing.

Methodology

Understanding the methodology behind an index fund also matters. This includes how they weigh between what assets to include and what proportion, and how often rebalancing will take place. This can also include other aspects, such as how an index identifies the accurate price and market capitalization of crypto assets, and how it handles additional network distributions like emissions, airdrops, and staking rewards. 

Returns

It is also important to get an overview of the index fund’s performance over time. Like normal financial assets, ascertain the price development of the index fund and how healthy this is before you invest in it. Reviews from current investors could help in this case, however, a reputable index fund should also have accessible documentation of their periodic returns. Review documents like this and consider the profits and losses made over time as part of your decision-making process. Also, it is important to consider the sustainability of these returns.

How To Invest In A Crypto Index Fund

Considering making your way into investing in crypto index funds? Here’s how to start;

Research And Choose Your Fund

Prior and proper research on available crypto index funds is paramount. If you already have an index fund in mind, then consider assessing them under the factors mentioned earlier. 

An example of a crypto index fund is the Bitwise 10 crypto index fund that track 10 popular cryptocurrencies including Bitcoin, Ethereum, Polygon, XRP, Litecoin, and Bitcoin Cash. Index Coop’s crypto index fund tracks the index of top DeFi project tokens, and eToro also offers several crypto funds on its Smart Portfolios.

As of November 2023, the Bitwise 10 crypto index fund consist of over 68% Bitcoin; you can obtain data like this from official publications and weigh your choices. When you finally decide on an index to invest in, proceed to create your account on the platform.

Fund Your Investment Account And Purchase An Index

Having decided which index fund operator and index fund to invest in, the next procedure is funding your account and purchasing the index fund’s shares. Like any other index fund, the shares give an investor the right to the assets held in the index fund according to their weight and relative to the amount you invested.

Monitor Your Investment

Now that you have successfully invested in an index fund, it is important to keep an eye on the index fund you invested in and the index fund manager as well. Index fund operators manage the AUM and could change the weight of the assets in their index with rebalancing. 

As an investor, follow any changes in the index and find out how these changes affect you. Also, follow up with the performance and consider moving your investments to maximize profits or limit losses. If needed, you can also involve the services of a professional in weighing up the index fund’s performance before taking any action.

Crypto Index Fund vs. ETFs

Like index funds, ETFs (Exchange Traded Funds) allow investors to invest in a basket of assets at once. They pool different assets and give investors an opportunity to own a diversified portfolio of handpicked assets with just a single investment. However, a few differences exist between them:

First, ETFs are traded on exchanges like stocks and cryptocurrencies and can be purchased directly from these exchanges in the same way that assets are purchased, a broker could be involved in this process too. In comparison, index funds are purchased from the fund managers and usually involve the creation of an account on the index fund manager’s platform.

Also, ETFs can be easily bought and sold on the exchange at any time within the official trading hours, but index funds are only cleared in bulk at market closure for the day. Therefore any index fund order (buy or sell) is satisfied at the close of trading for the day at the recorded Net Asset value (NAV). You can also purchase as little as one share of an ETF, but index fund managers specify the minimum amount of an index fund share that can be purchased. Thanks to this difference in buy and sale practice, ETFs are also relatively more liquid than index funds.

Final Thoughts

There are several ways to approach investment and crypto index funds are just one of those ways. For the regular investor in crypto index funds or the index fund operator, diversifying investments in the way index funds do it could save some losses as crypto assets experience differences in price development. It also serves investors looking to dive into crypto investing but seeking a pre-planned investment strategy. We have discussed the pros and cons of resorting to this strategy and how to approach them, but one vital part is running due research on crypto index funds available to you before making a choice.

While assets in the index could perform well, fund management is a huge factor as well. Therefore, it is important to extend your research to the index fund operator and ascertain their capability to navigate the investments through different market situations and their reputation as well. Note that this article is only meant to educate readers about crypto index funds and is not meant to be taken as financial advice. Always do your own research and due diligence before undertaking any investments. 

https://www.coingecko.com/learn/bridge-crypto-arbitrum-nova

Bridge From Arbitrum Nova to Ethereum

You can bridge funds from Arbitrum Nova to Ethereum by using third-party bridges like Orbiter Finance, Symbiosis Finance, Rhino.fi and Hop Protocol. Alternatively, you can use the official Arbitrum bridge that promises better security at the cost of an 8 day challenge period.

Key Takeaways

• Arbitrum Nova is the second Layer 2 solution developed by Arbitrum. Like Arbitrum One, it handles transactions in its execution layer so that more transactions are executed in a shorter time and for a cheaper fee. To speed up the process, Arbitrum Nova also utilizes a data availability committee to expedite the process of posting transaction data to Ethereum.

• Like any other blockchain network, crypto assets can be created on Arbitrum Nova. These assets can be moved through bridges between Arbitrum Nova, Ethereum mainnet, and other EVM or non-EVM networks.

• To move assets to and from Arbitrum Nova, users can opt for either third-party bridges that offer faster resolution, or the official Arbitrum bridge that offers better security at the cost of an 8 day challenge period.

Arbitrum Nova was developed for applications seeking higher throughput execution layers and willing to sacrifice some level of decentralization and security for this. Instead of the normal rollup technology used by Arbitrum One, Arbitrum Nova uses the AnyTrust protocol which adds an extra trust assumption in the form of a data availability committee that expedites the process of storing, batching, and posting Layer 2 transaction data to Ethereum.

This lets Arbitrum Nova offer faster transaction processing speed, compared to Arbitrum One. In essence, Arbitrum Nova is a higher-throughput and more trust-based variant of Arbitrum One. Like Arbitrum One, decentralized applications can be deployed on Arbitrum Nova. Fungible tokens and NFTs can also be minted on the network. Notable cryptocurrency projects that operate on Arbitrum Nova include Reddit Moons (MOON) from the r/cryptocurrency Reddit community.

Despite being relatively less popular, the Arbitrum Nova network executes over 300,000 transactions daily, and tens of new contracts are deployed on the network daily. Verified addresses on the network exceed two million, growing by at least 2,000 wallets every day. Defilama reports a TVL of $2.43 million for Arbitrum Nova, with most of the protocols being DEXs and bridges.

Arbitrum Nova users can move their assets between the network and other networks through bridges. Here are some independent bridges that support Arbitrum Nova, offering asset inter-network transfer services for cryptocurrency enthusiasts on the Arbitrum Nova network. The bridges below are listed in order of popularity based on their social media following.

Orbiter Finance

Orbiter Finance supports asset transfer between Ethereum and Layer 2 rollup networks like Linea, Arbitrum and Arbitrum Nova, Optimism, and zkSync Era. It charges a withholding fee that ranges from $3, and normal network charges could also apply.

Major role players in Orbiter Bridge’s technology include a Maker, the Sender, and a set of smart contracts. The Maker deposits and locks funds on the target (or destination) network, the Sender sends funds to the Maker on the source network, and the Maker proceeds to transfer an exact amount to the sender on the target network. 

This process is controlled by three smart contracts. The Maker Deposits Contract (MDC) oversees the custody of the Maker’s locked assets and the transfer of funds to the Sender. The Event Binding Contract (EBC) defines and controls these rules while the Simple Payment Verification (SPV) contract stores the proof of transactions on Orbiter. In this way, Orbiter hopes to support cheap and fast cross-rollup transactions.

How To Bridge Between Arbitrum Nova And Other Networks Using Orbiter Finance

1. Visit the Orbiter Finance bridge.

2. Connect your wallet to the platform.

3. Select the asset you wish to bridge.

4. Set the direction of your bridge.

5. Enter the amount you wish to bridge.

6. Click Send to continue.

7. Review the details of the transaction and click Confirm and Send if satisfied.

8. Approve the transaction from your wallet to complete.

The bridged asset will be received on the destination network once the transaction is completed.

Symbiosis Finance

Symbiosis serves inter-network asset transfer requests using pooled liquidity from EVM and non-EVM networks. Symbiosis uses smart contracts to implement asset transfer logic, creating a connection between blockchain networks of varying architecture. This process is also aided by the Symbiosis relayers that ensure successful communication between the concerned networks. 

Symbiosis claims that this procedure is completely decentralized and secure. Symbiosis Finance bridge supports several networks including Arbitrum One and Arbitrum Nova, Ethereum, Avalanche, Polygon, along with other networks. A fee of about $0.50 applies to bridging transactions on Symbiosis Finance, along with normal network fees.

How To Bridge Between Arbitrum Nova And Other Networks Using Symbiosis Finance

1. Visit Symbiosis Finance bridge.

2. Click Connect Wallet to connect your wallet to the platform.

3. From the Transfer From dropdown, select the source network and the asset you wish to bridge.

4. From the Transfer To dropdown, select the destination network and the asset you wish to receive.

5. Enter the amount of the asset you wish to bridge.

6. Review the details of the Swap and click Approve to allow the platform to use the asset (if needed).

7. Click Swap after the asset has been approved.

8. Approve the final transaction from your wallet to complete.

The bridged asset will be received on the destination network once the transaction is completed.

Rhino.fi

Rhino.fi bridge supports over 500 crypto assets and 6 major chains including Arbitrum Nova. Rhino Finance claims to have transacted over $1.5 billion worth of assets. It claims to be a self-custody platform that lets users move assets between chains without complex bridges or network switches. Depending on the asset and direction, the bridging fee on Rhino.fi is up to $3. Normal network transaction fees still apply.

By design, Rhino Finance is built on StarkEx Validium Layer 2 technology. It utilizes smart contract technology in a fashion similar to that described for the official zkSync bridge. Smart contracts deployed on the target chain and StarkEx work in synergy to retain and release funds on supported networks as required by users. The platform is governed by a DAO that votes on improvement proposals using DVF, the project’s native token which also doubles as a reward token for users of the platform.

How To Bridge Between Arbitrum Nova And Other Networks Using Rhino.fi Bridge

1. Visit Rhino.fi

2. Click Connect Wallet to connect your wallet to the platform

3. Select the asset you wish to bridge (note that some assets might not be available for the direction you wish to bridge).

4. Set your source and destination network.

5. Enter the amount of the asset you wish to bridge.

6. Approve assets where needed.

7. Click Bridge and approve the final transaction from your wallet.

The bridged asset will be received on the destination network once the transaction is completed.

Hop Exchange

Hop Protocol’s bridge currently supports Ethereum, Optimism, Arbitrum, Arbitrum Nova, Polygon, Gnosis, and XDai. It utilizes liquidity technologies, decentralized pools, and token minting strategies to create a communication path between Ethereum Layer 2 networks, sidechains, and the Ethereum mainnet. 

Hop uses smart contract tokens known as Hop protocol bridge tokens (hTokens), which are issued at a ratio of 1:1 with the locked asset. hTokens are flexible tokens that can be transferred and redeemed across chains, and they serve as a reflection of true assets locked on supported chains. The transfer command triggers a burning and minting function, where hTokens are burnt on the source network and the same variant and number of hTokens are minted on the destination chain and account.

How To Bridge Between Arbitrum Nova And Other Networks Using Hop Exchange

1. Visit Hop Exchange.

2. Connect your wallet to the platform.

3. Select the asset you wish to bridge and the direction of your bridge.

4. Enter the amount of the asset you are bridging.

5. Click Send to continue.

6. Review the details of the transaction in the popup window and click Send.

7. Approve the transaction from your wallet to complete.

The bridged asset will be received on the destination network once the transaction is completed.

Bridge From Arbitrum Nova To Ethereum Through Centralized Exchanges

Arbitrum One is supported by a large number of centralized exchanges, unfortunately, this is not the same for Arbitrum Nova. However, some centralized exchanges also support asset deposits and withdrawals through the Arbitrum Nova network. These centralized exchanges can be used as an improvised bridge. To use this feature, you can deposit your asset to the exchanges from the source chain and withdraw it to your wallet using the target network.

To bridge from Arbitrum Nova to Ethereum using a centralized exchange, send your Arbitrum Nova network asset from your wallet to the exchange and withdraw it to your wallet via the Ethereum network. Follow the reverse route to bridge from Ethereum to Arbitrum Nova via the CEX. In any case, ensure to select the right network and copy the right wallet address.

Official Arbitrum Bridge

The official Arbitrum bridge is operated by the Arbitrum team and only supports the bridging of assets between any of the Arbitrum networks (Arbitrum One or Arbitrum Nova) and the Ethereum network. It uses a mint-and-burn mechanism to move assets between supported networks. When bridging from the Ethereum network, the tokens are locked on the Ethereum blockchain and an equivalent amount is minted on the destination chain. To withdraw, the asset is burnt on the Arbitrum chain and the locked asset on the Ethereum blockchain is released.

However, as Arbitrum is an optimistic rollup, withdrawals from the official Arbitrum bridge will take 8 days to complete, as the challenge period has to end before funds are released.

How To Bridge Assets From Arbitrum Nova Through The Official Arbitrum Bridge

1. Visit the Official Arbitrum Bridge.

2. Connect your wallet to the platform.

3. Set the direction of your bridge (ensure you select Arbitrum Nova instead of Arbitrum One).

4. Select the asset you wish to bridge.

5. Enter the amount you wish to bridge.

6. Click Move Funds to Ethereum to continue (or Move Funds to Ethereum if you are withdrawing from Arbitrum Nova. You will need a third-party bridge to move assets between Arbitrum One and Arbitrum Nova).

8. From the next dialog, select a provider for your bridge. To use the official Arbitrum bridge, click Use Arbitrum’s Bridge from the top.

9. Review the terms and check the boxes if you agree with them. Again, note that it will take around 8 days.

10. Click Continue and approve the transaction from your wallet to complete

Assets bridged using the official Arbitrum bridge could take up to 8 days to arrive at the destination network.

 Final Thoughts

Bridging fees and the time taken to complete the asset transfer are some of the major points to consider while selecting a bridge. The official Arbitrum bridge could take up to 8 days to complete the bridging process. For third-party bridges, the process is usually faster and only takes a few hours at most. 

However, when using third-party bridges, ensure that you do your own research around the authenticity and reliability of each platform before you connect your wallet.

Also, note that this article only serves as a tutorial for bridging between Arbitrum Nova and other blockchain networks and should not be taken as financial advice. Always do your own research on the bridge you are intending to use before connecting your wallet, and ensure that all links are correct.

https://www.coingecko.com/learn/add-cosmos-to-metamask

Add Cosmos to MetaMask

You can add Cosmos to your MetaMask wallet through the Leap Cosmos Wallet MetaMask Snap. This lets you connect to Cosmos dApps and store supported Cosmos assets using your MetaMask account.

Key Takeaways

• MetaMask Snaps are JavaScript applications that can be integrated into the MetaMask wallet application, enabling users to install external applications and add extra functionalities to their wallet.

• Leap Wallet has developed a Snap for the Cosmos Network, where users can access the Cosmos network using their MetaMask account. 

• The Leap Wallet Snap allows users to manage their assets and connect to dApps on the Cosmos ecosystem using their MetaMask account.

Consensys is opening up the MetaMask wallet application to the rest of the crypto space. Since the introduction of the MetaMask Snap, the MetaMask wallet has transformed into a base application for tons of other applications. One such application is the Solana Wallet Snap, which enables users to connect to the Solana network through their MetaMask wallet. 

What Are MetaMask Snaps?

MetaMask Snaps are Javascript applications with prepackaged utilities that run alongside the MetaMask wallet application. They are permissioned third-party applications that leverage the MetaMask wallet’s facilities to function. MetaMask Snaps share a similarity with browser applications, where the MetaMask wallet serves as the browser in this scenario. MetaMask users can install Snaps and permit them to operate under the hood of the MetaMask wallet, enabling features such as cross-chain interoperability and transaction analysis. 

MetaMask Snaps currently cover transaction insights, notifications, and interoperability. Interoperability Snaps let users connect to non-EVM networks from their MetaMask wallet. In this instance, users of the Cosmos Network can manage their assets and connect to decentralized applications on the network using MetaMask and the Leap Wallet Snap. 

Now, let’s get to adding the Leap Cosmos Wallet Snap to MetaMask.

How To Install The Leap Cosmos Wallet Snap To MetaMask Wallet

MetaMask has developed a directory for available MetaMask Snaps. This is the recommended platform for downloading MetaMask Snaps as the Snaps go through a preliminary screening process. Nevertheless, always verify the Snap developer and source before installing.

Installing The Leap Cosmos Wallet Snap

1. Click here to access the application’s page.

2. Click Add to MetaMask to start the installation process.

3. Follow the prompt to complete the installation.

The Leap Wallet has now been installed successfully; you can now start running routine transactions on the Cosmos network with your MetaMask wallet. 

Let’s explore some of the operations you can perform using the Leap Cosmos Wallet Snap.

How To Use The Leap Cosmos Wallet Snap

You can access the Leap Wallet Snap interface from the application’s website. This is the portal for most operations using the Leap Wallet Snap.

Managing Your Cosmos Portfolio With The Leap Cosmos Wallet Snap

1. Click here to visit the Leap Wallet interface.

2. Click on Connect Wallet from the top right corner of the interface.

3. Select MetaMask to connect your Snap.

4. Approve the prompt from your MetaMask Wallet to complete the connection.

Your Snap is now connected to the platform. You can view and manage your fungible token and NFT portfolio from the portfolio section.

To see your wallet address, click All Chains from the top right corner of the overview section. Your wallet address for any network can be seen from the drop-down list of all networks in the hub. To receive an asset in your wallet, copy the address and send it to the sender or use any case or transfer to your wallet, for that particular network.

From your portfolio section, you can also perform some secondary activities, including voting on proposals and tracking your transactions.

Transact, Swap, Bridge, And Stake With The Leap Cosmos Wallet Snap

Besides managing your portfolio, the Leap wallet interface also serves as a one-stop platform for every activity you can perform from your personal wallet. 

First, click on Transact from the left-hand side menu

You can see available operations from the drop-down Menu.

Transferring Assets From The Leap Wallet Snap

1. To transfer an asset, click on Send from the drop-down menu.

2. Set the transaction parameters from this interface. Click on Source Chain from the top left corner to select the network, Click Select Token to set the asset you wish to transfer.

3. Now enter the receiver’s address in the Recipient section and the amount you wish to transfer.

4. Click Send and approve the prompt from your wallet to complete

How To Perform Swaps Using The Leap Wallet Snap

The Swap feature allows you to move assets around the Cosmos hub. This means that you can swap your asset for any other asset in any network in the hub. You can also move the same asset to different networks in the hub.

1. Click on Swap from the drop-down menu.

2. Set the direction of your swap and set the asset you wish to swap and the asset you are swapping to.

3. Enter the amount you wish to swap.

4. Click Review to continue.

5. If the conditions of the transaction are satisfactory, click Proceed and approve the prompt from your MetaMask wallet to complete.

How To Bridge Assets Using The Leap Wallet Snap

1. Click Bridge from the drop-down menu.

2. Set the direction of your bridge and the asset you wish to bridge.

Since you are bridging between any chain on the Cosmos Networks and an external network, you will need to connect to the other network as well.  Click Connect Wallet to connect the wallet for the source network to the platform.

3. Enter the amount you wish to bridge and click Review to continue.

4. Review the transaction details and click Proceed to continue.

5. Approve the transaction from the prompt on your MetaMask extension.

The bridged asset will be sent to your Leap Cosmos wallet once the transaction is confirmed on the source network.

How To Stake Your Assets Using The Leap Wallet Snap

The staking interface allows you to access all available staking programs in the Cosmos. You can select any network in the hub and stake supported assets to the validators. You can also select the staking structure. You can choose between plain staking and liquid staking.

1. To stake your assets, click Stake from the drop-down menu.

2. On the Stake window, click the network dropdown in the left corner to select the network you wish to stake to.

3. Click on Select Validator to set the validator you wish to stake with.

4. Enter the amount you wish to stake.

5. Click Stake to continue.

6. Click Proceed and approve the prompt from your MetaMask wallet to complete the process.

You can also unstake your assets from this interface by navigating to the Unstake section.

Connecting To A dApp Using The Leap Cosmos Wallet Snap

You can also access any dApp using the Leap Wallet Snap. There are possibilities that the Snap isn’t supported on some Cosmos dApps. However, where supported, here’s how you can connect to a dApp using the Leap Wallet Snap. In this example, we will be connecting to the Kujira dApp.

1. Click here to visit the Kujira FIN dApp.

2. Click Connect Wallet from the top right corner.

3. Click the MetaMask icon to connect. 

4. Approve the connection request from the prompt on your MetaMask wallet.

You are now connected to the Kujira application from your Leap Wallet snap.

You can transact on the platform as usual. The approval for every procedure will be requested from your MetaMask. Once you approve the prompt, the transaction will be completed. 

These steps also apply to other supported applications, as the connection procedure is similar for every dApp that supports MetaMask Snaps.

FAQs about the Leap Cosmos Wallet Snap

Here are some of the most frequently asked questions regarding the Leap Cosmos Wallet Snap:

Can I Access My Cosmos Assets Within The Metamask Wallet Interface?

No, you cannot access your Cosmos Assets on the MetaMask wallet interface. Just like other MetaMask interoperability Snaps,  Leap Wallet MetaMask Snap’s abilities are limited to signing transactions from the MetaMask wallet. 

The LeapBoard is your go-to platform for managing your assets and performing any transactions, where the Snap contracts MetaMask wallet’s facilities for final approval. Your assets cannot be sent directly from MetaMask, as in the case of EVM networks like Ethereum and other EVM chains.

Who Holds The Private Key To My Leap Wallet?

While you still hold the private key to your Leap Wallet, the Leap Wallet Snap doesn’t provide you with a private key for your wallet. However, as with other Snaps, you maintain full custody of your assets on the Leap Wallet Snap, which is attached to the MetaMask wallet. 

This means your MetaMask wallet’s private key serves for your Leap Wallet Snap as well. Once you import the private key to any other browser extension, you can access your Leap Wallet portfolio using the wallet.

Is The Leap Cosmos Wallet Snap Secure?

Leap Wallet claims that the MetaMask Snap is ‘extremely safe’. But just like any other hot wallet, it is important to understand the security level it offers, and that hot wallets come with their share of security risks when interacting with dApps. A cold wallet is recommended for maximum security of your assets.

Final Thoughts

For cryptocurrency investors who seek a way to manage their assets from a single application, MetaMask Snaps makes this possible. Leap Wallet offers investors an alternative to using the Cosmos Wallet as a self-standing application. If this alternative appeals to you, then this guide takes you through the process of installing the Snap and managing your Cosmos portfolio without having to install a new wallet.

Note that this guide might not be exhaustive of every operation that could be performed using Leap Wallet MetaMask Snap. In such cases, ensure that you understand the procedures before undertaking them. You can also refer to our other guides on MetaMask Snaps to get a better overview of Snaps and what using them means for you as a cryptocurrency investor.

As with every decentralized application, ensure that you understand the permissions requested before granting them. You can discontinue the installation process if the requested permission is not clear or if you do not wish to grant the application such permissions. Also, note that the Snaps function is only available for the MetaMask browser extension at the time of writing.

Having said this, note that this article only serves to guide investors through the process of installing and using the Leap Wallet Snap, and should not be taken as financial advice. All protocols featured in this article is solely used to illustrate the capabilities of the Leap Cosmos Wallet Snap and MetaMask. 

https://www.coingecko.com/learn/best-crypto-exchanges-nigeria

What Are the Top 8 Crypto Exchanges in Nigeria?

Nigeria is one of the biggest cryptocurrency hubs in Africa, and the country is first worldwide in P2P crypto traading volume. Here is a list of eight of the best exchanges you can use in Nigeria based on the number of users, and sorted by monthly visits based on Similarweb data: Binance, NairaEx, Quidax, Luno, Bybit, Kucoin, OKX and ByBarter.

Key Takeaways

• Nigeria accounts for a majority of crypto-related activities in Africa and is dominant in global crypto-related activities as well.

• Nigerian crypto reported investors moved over $56 billion worth of cryptocurrencies and stablecoins in the previous year.

• P2P trading platforms operated by global and native cryptocurrency exchanges account for a significant percentage of the daily cryptocurrency transactions in the region, and Nigeria ranks first worldwide in terms of P2P trading volume.

• Based on Similarweb data, the top exchanges in Nigeria by traffic are Binance, NairaEx, Quidax, Luno, Bybit, Kucoin, OKX and ByBarter.

Nigeria sits at the heart of West Africa in the Gulf of Guinea and houses a population of over 250 million people spread across 36 states and the Federal Capital Territory. In addition to a diverse cultural heritage, Nigeria boasts Africa’s largest economy with a GDP of over $390 billion in 2023, expected to rise by 79% in the next 5 years. With an economy of its size and a resource-rich topography, Nigeria is a fertile ground for numerous economic activities, including ones related to cryptocurrencies and other digital assets. Here’s how cryptocurrency has fared in this region over time.

State of Cryptocurrency in Nigeria

The national legal provisions for crypto-related activities in Nigeria are unclear at the time of writing, although just like in many other countries, cryptocurrency is not legal tender in Nigeria at time of writing. However, this has not deterred the growth of crypto-related businesses and the adoption of crypto assets and blockchain technology in this region. According to data published by CoinGecko, Nigeria accounts for over 66% of tracked interest in cryptocurrency in Africa.

Cryptocurrency serves two purposes here, a swift banking medium and a financial investment. Evidently, the latter is the principal attraction, but there have been instances of local Nigerian businesses accepting cryptocurrency payments. While blue chips like Bitcoin and Ethereum, along with stablecoins (USDT predominantly) are the most desired assets in this region, Nigerian investors are also interested in cryptocurrencies as an investment. In line with the goal of generating significant and fast income from crypto investments, Nigerian investors have also shown a strong attraction for memecoins, NFTs, low-cap altcoins, and incentivized programs like airdrops and bounty hunting. For Nigerians, cryptocurrencies, especially stablecoins also play a minor role as a hedge against inflation.

Nigerians have also shown strong interest in other areas related to crypto. A CoinGecko research piece places Nigeria as the country with the third highest interest in crypto jobs with a search score of 143. This also follows a number one rank in CoinGecko’s “Top 15 countries most curious about cryptocurrency”. Nigerians’ interest in cryptocurrency and crypto jobs stems from the enthusiasm its youths are known for; an additional catalyst is the recorded high rate of unemployment and under-employment in the region. Trading Economics reports a 53% ATH in youth unemployment in Nigeria in 2020 – a figure similar to that recorded for South Africa with over 51% youth unemployment in 2022, according to Statista

A Chainalysis report ranks Nigeria as the nation with the highest reported P2P trading volume and an overall second in the worldwide ranking of cryptocurrency activity index. Statista reports an average revenue of $5 and about 1.4% penetration in the region. This means that at least 1.4% of the Nigerian population has used a crypto-related product. This figure is projected to climb by almost 100% to 2.56% in 2027. According to a report by Punch, a local Nigerian news firm, Nigerians have moved over $56 billion in cryptocurrencies between July 2022 and June 2023, a 9% increase from the previous year.

Now, let’s look at the top crypto exchanges in Nigeria.

Top Crypto Exchanges in Nigeria

Crypto trading activities in the region are dominantly spot and P2P trading. Global crypto exchange service providers like Binance and OKX offer a platform for general and special trading services for Nigerian investors, along with local trading platforms that also account for a significant percentage of the recorded cryptocurrency transactions. Here are some top crypto services providers in Nigeria, ranked by estimated monthly website traffic according to Similarweb.

Binance – Leading Global Centralized Cryptocurrency Exchange

Binance offers spot, derivatives, and P2P trading services for its users. According to data from Statista, Binance receives about 32% of crypto trading transactions by Nigerians, and the full-suite trading platform accounts for a bulk of trading activities by Nigerians. At the time of writing, there are no geographical restrictions that apply to Nigerians, therefore, you can enjoy all of the services provided by Binance from Nigeria. Binance has also developed support for the Nigerian Naira (NGN) for spot fiat trading. The NGN/BTC and NGN/USDT spot pairs are live on the Binance trading platform.

Fiat Deposit Methods

Binance supports on-ramp Naira deposits and direct purchases through third-party financial firms. Due to the unclear legal provisions for cryptocurrency in Nigeria, it is not certain if Binance works directly with Nigerian banks for on-ramp services, although bank transfers are supported.

Trading And Other Fees

The same fee structure applies to Nigerians and traders from other locations. Binance charges fees for Naira deposits and withdrawals, trading, and crypto withdrawals as well. According to the new fee structure, Binance charges a 0.5% fee of Naira for deposits and withdrawals, and the minimum amount (for deposits and withdrawals) is 100NGN.  Binance also charges a 0.1% trading fee and charges also applied to crypto withdrawals vary according to the asset.

Customer Support Channels

Binance has a dedicated support system for their users worldwide. Users can channel their complaints to customer support through social media channels like X, communities like Telegram, and on-site complaint channels.

Safety And Security

Proof of Reserves details for the Binance is available. Binance also claims to operate a customer funds deposit insurance system (SAFU) to preserve customer’s funds. It has also delineated its fund-handling strategies like splitting funds across several hot wallets. As a user, 2FA and password security systems are also available on Binance. 

However, Binance is still a custodial platform, where the institution holds all deposits in its custody, so users are still advised to apply caution while using the platform.

KYC Requirements

Binance operates a compulsory KYC system. Users must complete the KYC verification process before using any services on the platform. Nigerians can verify their identity using their NIN identity cards.

Additional Features

Binance’s staking services are available to Nigerians. Investors from Nigeria can also participate in extra activities like IEOs.

NairaEx – Bitcoin P2P Trading Platform For Nigerians

NairaEx has been live since 2015 and has processed Bitcoin trades for Nigerians since this time and has maintained its old-fashioned user interface. The platform claims to have over 130,000 users and has processed over 900,000 Bitcoin trades to date. NairaEx provides exclusive support for Bitcoin P2P trading. Users can buy and sell Bitcoin through the P2P trading platform. NairaEx claims to process payments for sales and purchases instantly to any Nigerian bank.

Fiat Deposit Methods

NairaEx supports Naira deposits through bank transfers and debit/credit cards.

Trading And Other Fees

Trading on the platform is free, with no hidden or extra fees. However, NairaEx charges fees for withdrawals of Bitcoin from the NairaEx wallet to external addresses based on the Bitcoin network transaction fees.

Customer Support Channels

A 24/7 automated customer support feature is available on the NairaEx platform. The customer support team is also available on the project’s Telegram community to support users.

Safety And Security

NairaEx claims to securely protect users’ profiles and users’ funds, with 2FA and password features used to secure user accounts, although our team was unable to uncover specific details around how the platform protects users’ funds. That said, like all custodial exchanges, users are advised to apply caution while using their platform.

KYC Requirements

New users must verify their identity before they can use the platform. KYC documents include either a user’s driver’s license or NIN identity card.

Additional Features

NairaEx offers Bitcoin trading services exclusively. No extra services are offered on the platform. No extra asset is traded on the platform as well. The referral program, however, rewards users for inviting their peers to use the platform.

Quidax – Cryptocurrency Custody And Exchange Application For Nigerians

Quidax is a cryptocurrency exchange and custody application. It offers several products that it claims will help Nigerians (and cryptocurrency investors in other countries where it is available) cryptocurrency investors to transact using crypto. Quidax supports crypto purchases using the Nigerian Naira through on-ramp crypto purchases and also through the Quidax exchange. Over 50 cryptocurrencies including memecoins and stablecoins are tradable on the Quidax exchange.

Fiat Deposit Methods

Quidax has three deposit methods. Quidax Direct enables users to deposit directly from their banks, Quidax also has a voucher deposit and withdrawal feature. Through Quidax Pocket, users can deposit Naira via third-party fintech applications.

Trading And Other Fees

Quidax charges fees in Naira for fiat deposits and withdrawals. The minimum fee charged for deposits and withdrawals is N100, higher charges apply to higher amounts. Quidax also charges a 0.1% trading fee and withdrawal fees for crypto assets are charged according to the asset. See full details of charges on Quidax.

Customer Support Channels

Quidax has dedicated customer support facilities on the official website and social media as well. Users can get quick assistance using the live support feature or reach out to customer support via email tickets or on any of their social media communities.

Safety And Security

2FA and password security features are available for user profiles. Quidax claims that users’ funds are completely secure on the platform, however, the technology setup for their security is unknown. Regardless, it is advised that users take security precautions while using the application, as Quidax is a custodial platform.

KYC Requirements

New users must provide the required personal documents for the KYC process. KYC verification is compulsory to access any of Quidax’s products.

Additional Features

Additional features on Quidax include a virtual card facility, Quidax’s ‘save in USD’ feature with a 10% interest, and the Quidax Vault. Quidax Vault is a portal for users to stake their crypto assets, which offers rewards in the Quidax token.

Luno – Cryptocurrency Wallet and Exchange

Luno is a one-stop crypto trading platform available in over 40 countries including Nigeria, offering routine trading services via the integrated exchange. Over 20 crypto assets including Bitcoin, Ethereum, and stablecoins can be traded on the Luno exchange. Luno also offers fiat deposits, crypto purchases, and withdrawals for Nigerians as well as other supported locations. The Luno application is available for Android and iOS devices.

Fiat Deposit Methods

Luno supports Naira deposits through bank transfers and debit/credit card deposits. It also offers Naira deposits through vouchers; registered users can purchase Naira vouchers and redeem them in their Luno accounts. Vouchers can also be used for withdrawals.

Trading And Other Fees

Luno charges a 2% fee on Naira deposits with a maximum charge of N2,000 per deposit. The 2% fee also applies to Naira withdrawals. Trading fees vary across trading pairs but range from 0-0.4% depending on the user’s tier, which is determined by their trade volume over the last 30 days. Fees also apply to crypto withdrawals and vary according to assets and the direction of withdrawal. Here’s a breakdown of the fee structure for Luno.

Customer Support Channels

Luno has a dedicated customer help center and customer support social media Twitter (X) account. Users can channel their complaints to the customer support team. Customers can also reach out on social media with their complaints.

Safety And Security

Luno claims to be a regulatory-complaint firm and employs strategic security practices to keep users’ funds safe. It claims to store the majority of customers’ funds in ‘deep freeze’. Luno’s ‘deep freeze’ security structure consists of a multi-signature wallet where the keys are generated and stored entirely offline and offsite. The keys are managed by Bitgo Custody and Fireblocks. Again, because Luno is still a custodial platform, it is still recommended that users apply security precautions while using the platform. 

KYC Requirements

To use Luno, users must complete a compulsory KYC process. A minimum of Level 1 KYC verification (mobile number and basic personal details) is required to use any of Luno’s services. Limits are applied to Level 1 and Level 2 verification levels. Nigerians can verify their identity using their NIN identity cards, although Level 3 verification requires additional personal information such as occupation and source of funds. 

Bybit – Centralized Exchange For Spot, P2P, And Derivatives Trading

Bybit is available to Nigerians and offers spot, P2P, and derivatives trading services. Nigerians can trade crypto for Naira through the P2P platform and also make direct crypto purchases from their banks. However, the Nigerian Naira is not supported for spot trading on the platform yet.

Fiat Deposit Methods

Fiat deposits through bank deposits are supported on the platform. Nigerians can purchase crypto directly from their banks using the on-ramp service. Bank transfers are also supported on the P2P trading platform.

Trading And Other Fees

Bybit charges a 0.1% fee on spot trades. It claims that P2P trades are free of charge. Withdrawal fees for crypto assets vary according to the asset and direction of withdrawal. Here’s a breakdown of the Fee structure for ByBit exchange.

Customer Support Channels

Bybit’s customer support team is available on the project’s social media and communities to assist users. The live support feature is also available on the project’s platforms and users can also contact the support team through support tickets.

Safety And Security

Bybit’s Proof of Reserves data is available on the platform, and ByBit claims that users’ funds are safe on the platform. On the user’s end, they can protect their accounts using 2FA and passwords. However, it is still important to for users to apply adequate security precautions while using the platform as it is a custodial platform. 

KYC Requirements

Users are required to complete at least the basic KYC verification process to use crypto trading services on Bybit. Nigerians can complete their verification using their NIN identity cards and their BVN.

Additional Features

In addition to the trading services, Bybit also offers passive income opportunities through the staking program and crypto lending services. Web3 applications like an NFT marketplace are also available on the platform.

Kucoin – Centralized exchange with support for P2P trades with Naira

Kucoin’s exchange services are available to Nigerians. It offers spot, derivatives, and P2P trading services, and on-ramp crypto purchases are also available. Nigerians can also trade crypto with Naira on the P2P trading platform and withdraw to their traditional financial institutions.

Fiat Deposit Methods

The Nigerian Naira isn’t supported for spot trading on Kucoin yet, however, Nigerians can deposit Naira to the platform using direct bank deposits or through debit or credit cards. KuCoin has also released a bank transfer deposit for NGN-USDT.

Trading And Other Fees

According to the exchange, P2P trading is free of charge. A 0.1% fee applies to spot trades. Cryptocurrency withdrawals are charged according to the asset and the direction of the transfer. Here’s a detailed fee structure report for Kucoin Exchange.

Customer Support Channels

Dedicated user support channels are available on the platform. The customer support team is also available on social media channels and online communities

Safety And Security

Users can protect their accounts using 2FA and passwords. Proof of Reserves data is available and Kucoin claims that users’ funds are safe on the platform. As KuCoin is a custodial platform, remember to apply safety precautions while using the platform.

KYC Requirements

Kucoin is a KYC-compulsory platform. Users must verify their identity before using the services. Nigerians can complete their KYC using their identity cards and driver’s license.

Additional Features

Additional features on the platform include the staking program and the savings program with APR up to 25%. These services are available to Nigerians.

OKX – Zero Fee P2P Trading Platform for Nigerians

OKX offers spot, derivative, and P2P trading services to Nigerians. The Nigerian Naira is not available for spot trading on the platform; however, Nigerians can purchase cryptocurrencies directly from their bank account using the on-ramp service or through the P2P trading platform.

Fiat Deposit Methods

On-ramp purchases using NGN are supported on the trading platform through bank transfers. Alternatively, users can purchase crypto from the P2P platform, which supports Nigerian banks.

Trading And Other Fees

OKX claims that its P2P trading service is devoid of trading fees. Fees apply to spot and derivative trading. OKX charges up to 0.1% of the traded amount, while crypto withdrawal fees vary according to the asset. Get the complete details of the charges applicable on OKX exchange.

Customer Support Channels

The OKX customer support team is active on social media platforms and the project’s Telegram community. Users can also create a complaint ticket on the platform. The live support feature is also available on the platform.

Safety And Security

OKX claims to secure users’ funds using offline and online storage systems and the OKX shield. Profile security systems like 2FA and passwords are also available to users. Users are still advised to apply caution while using the platform, as OKX is a custodial platform.

KYC Requirements

Users are required to complete at least Level 1 KYC verification before they can use the platform. Nigerians can verify their identity using their NIN identity cards.

Additional Features

OKX offers extra products like staking services and lending facilities. These services are available to Nigerians on the platform.

ByBarter – Decentralized P2P Trading Platform

ByBarter is a decentralized P2P trading platform available in over 248 countries including Nigeria. Users can purchase cryptocurrency from their peers on the platform using the Nigerian Naira. ByBarter offers an interactive approach to exchange, similar to other P2P platforms, however, it adopts a self-custody strategy powered by the blockchain and smart contracts. The ByBarter trading contract mediates the trade, the crypto seller commits the traded amount to the smart contract and releases the funds to the buyer once they confirm that fiat payment has been made to their provided bank account.

Fiat Deposit Methods

The fiat phase of P2P trades on Bybater is settled on the user end. The seller provides their bank details while the buyer executes the fiat transfer using a desired traditional finance service provider. Crypto deposits and withdrawals from the platform are done via personal wallets.

Trading And Other Fees

P2P trading on ByBarter is free of charge. Crypto transfers are on-chain, where applicable fees are dependent on network conditions.

Customer Support Channels

Users can make their complaints on ByBarter’s Telegram channel or by contacting the support team through social media platforms.

Safety And Security

Users retain custody of their cryptocurrencies while using the platform, and no deposits are required. It is advised that traders confirm that the fiat has been received on their end before completing the trade.

KYC Requirements

There are no KYC requirements to use the platform. Users only need to connect their wallets to the platform.

Additional Features

ByBarter only offers P2P fiat trading for the Nigerian Naira. No additional services have been added to the platform at the time of writing.

Overview Of The Best Centralized Cryptocurrency Exchanges In Nigeria

Below is a summary of the top 7 centralized crypto exchanges in Nigeria.

Final Thoughts

Nigerians have a sustained attraction for cryptocurrency, mainly for the financial benefits it promises. This has made the region an important role player in the space and a fertile ground for the progression of crypto adoption amidst unclear regulatory provisions for digital currencies in the region.

Statista’s projections, including an over 2.5% penetration by 2027 against the current 1.4% penetration show continuous growth in crypto activities in Nigeria. Exchanges and other crypto-related projects in the region will play a vital role in meeting this projected adoption, through accessible platforms for routine and interactive crypto transactions, providing users with a platform to learn practical crypto applications.

Having said this, note that this article only serves to educate readers on available exchanges for crypto trading activities in Nigeria. This article is not meant to be taken as financial advice, and users should do their own research before choosing any cryptocurrency platform. 

https://www.coingecko.com/learn/what-are-centralized-crypto-exchanges-cex

What Are Centralized Cryptocurrency Exchanges?

Centralized exchanges are online platforms used by traders to buy and sell cryptocurrencies. They offer fiat on-ramp services, making it easy for investors to buy and sell crypto with fiat money like the US dollar. However, unlike decentralized exchanges, which connect directly to a user’s wallet, centralized exchanges are custodial, where users’ assets are stored with the exchange. 

Key Takeaways

• Centralized exchanges are the custodians of customers’ assets and offer an integrated interface to handle trading of supported assets. In order to use a centralized exchange, users must pass KYC checks. 

• Centralized exchanges offer fiat on-and-off ramp services, making it easy for users to buy and sell cryptocurrencies with fiat money.

• Some considerations when deciding on which centralized exchange to use include: supported assets, regions supported, proof of reserves, and trading volume.

Cryptocurrency exchanges are an online version of a marketplace, and can be either centralized or decentralized. A centralized crypto exchange resembles a bank, where the institution is the custodian of all digital assets deposited on the exchange and matches buyers and sellers on its platform, while a decentralized exchange cuts out the intermediary, using on-chain smart contracts to run its exchange services.

Based on data from CoinGecko, centralized exchanges are dominating the market and are currently the go-to platform for cryptocurrency trading, where the top 10 exchanges by 24h volume are all centralized. 

Binance has over $14.5 billion in 24h volume, while Uniswap, the biggest decentralized exchange, only has around $1.2 billion in 24h volume.

In this article, we look at centralized cryptocurrency exchanges, their features, and how to choose the most suitable centralized exchange for your investment and trading activities.

An Introduction to Centralized Crypto Exchanges

A centralized exchange acts as an intermediary to conduct transactions, where both buyers and sellers trust this entity to handle the transactions and their assets. It’s similar to a bank, where customers trust a bank to look after their money for them. Centralized exchanges are also regulated, with users needing to pass KYC (Know-Your-Customer) and AML (Anti-Money Laundering) checks to verify their identity before they can register and use the exchange.

Centralized exchanges offer an easy way for new users to trade cryptocurrencies by removing worries such as sending funds to the wrong address, or losing their private keys (and subsequently access to the wallet and all its funds). After all, as the centralized exchange holds custody of all funds, users can reach out to customer service to restore their account if they forget their password. 

Ultimately, the success of a centralized exchange largely depends on its trading volume and liquidity, as the higher the level of trading volume, the lower the risk of volatility and slippage, where the price of a token changes during the execution of a trade request.  

Features of a Centralized Exchange

Now, let’s look at some of the key features of a centralized exchange and how these work.

Order Book

The order book is an integral part of a centralized exchange’s design. Centralized exchanges operate an order book to allow customers to place a trade. An order book is a record of buy and sell requests (for an asset pair) by traders. It usually features a sell-side and buy-side with prices quoted relative to the base currency. In a usual order book system, the orders are arranged according to the price ranges, where orders at specific prices are calculated and presented in the book. Sell orders are arranged in ascending order (lowest asking price first) while buy orders are arranged in descending order (highest bid first).

Source: Order Book – BTC/USDT (Binance)

The order book is proof of the liquidity level for an exchange or an asset, where the exchange executes traders’ buy and sell requests based on the order book. For instance, a Buy order that corresponds to the presiding asking price is executed immediately; otherwise, it is added to the order book to be executed when the requests are fully met. In a case where assets available at the presiding price range are not enough to complete the request, the remainder is also added to the order book. Order books are real-time, and balances change at a rate equal to the trading activities.

On decentralized exchanges, trading is facilitated by liquidity pools.

Fiat On-Ramp/Off-Ramp

Centralized exchanges make it easy for users to buy crypto with fiat money through fiat on-ramp services. These services enable investors to purchase cryptocurrencies using funds in their traditional banks, and usually involve a third-party financial service provider that executes the purchase request on behalf of the exchange and the customer. 

The third-party financial service provider partners with banks or electronic payment services to access the fiat money in the customer’s bank, although credit cards usually come with an additional fee. Fiat on-ramp simplifies an investor’s entry into the crypto space, cutting the hassles of purchasing their first crypto asset through other complicated procedures. Likewise, most centralized exchanges also support direct fiat withdrawals to customers’ bank accounts.

Fiat/Cryptocurrency Pairs

Customers exchanges that support fiat/cryptocurrency trading pairs are able to trade cryptocurrencies with a fiat currency as the base or quote currency. The exchange creates a channel for customers to deposit fiat money into their exchange accounts, like the fiat on-ramp services mentioned above. Traders can then trade the deposited fiat money for a paired cryptocurrency. 

Fiat-crypto pairs also enable traders to exchange their cryptocurrencies for a fiat currency. Fiat withdrawal channels on exchanges like this enable traders to withdraw the fiat currency to their banks, completing the fiat-crypto connection. Crypto pairs for fiat currencies like the British pound, Nigerian Naira, and the Turkish Lira can be traded against cryptocurrencies on centralized exchanges like Binance.

Custodial Wallets

Unlike a decentralized exchange, centralized exchanges operate independently of a blockchain network. Centralized exchange platforms are essentially web2 platforms with an embedded algorithm for tokenization and simulated trading. That is, the real assets are not in constant movement during trading as seen in decentralized exchanges. To use a centralized exchange platform, a customer creates an account and is then assigned a wallet address for every crypto asset supported by the centralized exchange. This wallet is a front for the exchange-owned hot wallet.

Assets are held in the hot wallet but every customer is assigned their rightful share of the total fund held. The exchange maintains control of the wallets on its platform, which means that customers do not possess the private keys to their exchange wallets. To perform a withdrawal, customers send a request to the exchange administration to transfer their share of the funds in the exchange’s custody to a different wallet. If this request satisfies the provided conditions, the exchange proceeds to perform an asset transfer to the provided wallet from the custodial wallet. This process is automated in many exchanges, however, some centralized exchanges perform manual withdrawals as well.

To learn more about the differences between exchange wallets and non-custodial crypto wallets, you can check out our article on non-custodial crypto wallets vs. exchange-based wallets.

KYC Requirement

KYC (Know-Your-Customer) is unique to centralized exchanges, and describes an exchange’s customer profiling procedure. It is the exchange’s way of identifying a customer and ensuring that they are who they claim to be. The goal of KYC is to prevent criminal activities such as money laundering, fraud, and more. 

Most exchanges require personal data such as national identity cards and facial identification, along with registered phone numbers. 

What Happens When You Buy Cryptocurrencies?

When you swap cryptocurrencies in a decentralized exchange, the crypto asset is sent directly to your wallet. However, this is different on centralized exchanges since customers are technically not the owners of their wallets on centralized exchanges. When you place a purchase order for a cryptocurrency on a centralized exchange, the exchange updates your account balances to reflect the transaction once your order is filled (completely or partially). The purchased asset is added to your account while the asset used in the purchase is removed from your account. With the new purchase reflected in your account, you can now withdraw the asset to your non-custodial wallet.

If you buy a crypto asset using fiat on-ramp services provided by a centralized exchange, the on-ramp service provider charges you for the amount used in the purchase (including service charges) while the exchange runs an order book operation to make a cryptocurrency purchase and updates your exchange account with the purchased crypto asset. Like in the earlier case, you can now withdraw the asset to another wallet.

How to Choose a Centralized Exchange

Are you looking to trade on a centralized exchange? Here are some things you should consider before choosing a centralized exchange;

Supported Assets

If an exchange doesn’t support the asset you wish to trade, the other factors become of little use. Therefore, check the exchange to verify if the asset you wish to trade is listed on the platform. Also, check the pairs to ensure that the pairing also works for you. 

For a trader who doesn’t have any particular asset in mind, opting for an exchange with support for a higher number of assets might be the best decision after taking other factors like security into consideration. Also, as EVM networks may have different transaction charges, you might also consider the exchange’s support for an asset on cheaper EVM networks; this could also save you some withdrawal fees if you’re looking to move your assets on-chain.

Region Supported

Some centralized exchanges focus on a specific region, and their complete services might be unavailable in certain areas. When you’re looking to choose an exchange, it’s best to find one that has a presence in your region as they may offer region-specific fiat money deposit methods that come with lower fees. 

For example, crypto exchanges in India offer IMPS, NEFT, and RTGS for instant deposits, while users in Singapore may use local payment methods such as PayNow or GrabPay to purchase crypto on supported exchanges.

Security

How secure an exchange is depends on the security system it operates in handling the funds in its custody and also in securing user’s profiles. 

One thing to look out for is the 2FA security options available to secure user accounts. Ideally, the platform should offer 2FA options beyond SMS authentication, as SIM swapping can occur, where hackers take over your mobile number and use it to access your social media and exchange accounts. 

Since centralized exchanges hold users’ funds, it is also important to understand how they handle these funds to ensure that a hacker doesn’t gain access to the hot wallet and also to limit the losses if the hot wallet gets attacked. Some exchanges split users’ funds into different wallets (including a cold wallet for extended storage) to reduce losses should any of the wallets get breached. Understand how the exchange you have in mind approaches this and consider this while choosing an exchange to use.

Proof of Reserves

CoinGecko has integrated the Proof of Reserves feature on its platform to enable investors to assess the financial credibility records of an exchange easily. This is available for most exchanges tracked on the platform, and is a consideration when it comes to calculating an exchange’s Trust Score.

Proof of Reserves (PoR) is a record of assets in an exchange’s (or any financial institution’s) custody with a means of verification, which rose in relevance after a slew of centralized crypto institutions went insolvent. PoR enables customers to verify that their institution is actually in the custody of their assets as promised and not just on paper.

Proof of Reserves usually feature on-chain verification methods, and you can see the breakdown of the different tokens held by an exchange, as well as how their total assets compare against their 24h trading volume on GeckoTerminal.

Trading Volume

Trading volume is a show of activity on an exchange and to an extent, proof of liquidity. Using a liquid exchange can prevent a trader from running into losses from slippage due to poor liquidity. The availability of buyers also means your orders stand more chance of getting filled faster, compared to low volume (and low activity) centralized exchanges. 

It is also important to take a look at the order book, the order book spread, and density since trading volume data can be bloated. Also, note that liquidity levels might differ for different assets on the same exchange.

Fees

Centralized exchanges charge fees for trading and withdrawal. Check out the fees charged by the exchanges you have in mind for each of these activities. The difference in fees charged across exchanges for both activities might differ considerably. Trading on an exchange that charges less fees can save you a significant amount. 

However, it is important to consider this alongside other factors like security. Depending on the trader, security might be paramount, especially if you wish to hold your trading capital and profits on the exchange for an extended period of time. Otherwise opting for a cheaper exchange might be the most profitable move if you’re intending to buy crypto with fiat before moving your cryptocurrencies to a non-custodial wallet.

Trading Features

Consider the trading services available on the exchange. Some centralized exchanges are primarily spot trading platforms with no or developing support for other trading types like perpetual trading and futures trading. If you wish to simply perform a direct asset swap, then a spot trading platform works for you. 

However, if you are a futures, perpetual, or derivatives trader, then consider focusing your research on exchanges that offer these services. Also, if there are chances that you could experiment with other types of trading in the future, then creating an account on an exchange that offers spot trading alongside these other trading services might be the best for you. This is to avoid going through the process of creating a new account and moving your funds to another exchange when you wish to engage in more advanced forms of trading.

Additional Features

Contemporary centralized exchanges now offer extra financial services such as P2P trading facilities, passive income programs like staking, and even more services like launchpad for IEOs which could benefit their users. These services might come in handy for you as an investor, as you’ll have the opportunity to generate yield on your assets on the exchange.

Do note that as the exchange will be staking your assets on your behalf, your assets will still be held by the exchange. If you are looking to maintain control over your assets, you can explore other decentralized staking options such as liquid staking.

Centralized Exchanges (CEX) vs. Decentralized Exchanges (DEX)

We’ve briefly mentioned decentralized exchanges above, and here’s a quick summary of the key points of both CEXs and DEXs – check out our article on CEXs vs. DEXs for a more in depth comparison.

Final Thoughts

Centralized exchanges are arguably an easier alternative to decentralized exchanges, this is because, despite the complicated technology that it operates under the hood, it is able to abstract these procedures into straightforward processes. This makes it appealing to newer crypto investors who are looking for an easy way to trade cryptocurrencies. 

However, that isn’t to say that centralized exchanges are necessarily better than decentralized ones, as they both cater to different users. For users who want to maintain full custody over their cryptocurrency holdings, a decentralized exchange lets them trade directly from their crypto wallet.

Finally, as seen in what happened to FTX and Celsius, not your keys, not your coins. Once you lock your crypto assets into a centralized exchange, you’re essentially locking them into a wallet owned by the exchange and have given up custody of your own assets. Our recommendation is to move cryptocurrencies you’re intending to hold in the long-term into a cold wallet, while keeping only your trading funds on the exchange or in a hot wallet. 

This article is only meant to serve as an educational guide around some considerations when choosing a centralized exchange, and should not be treated as an exhaustive list. Always do your own research before depositing funds on any platforms. 

https://www.coingecko.com/learn/airdrop-scams-crypto

Airdrop Phishing Scams

Airdrop scams are phishing attacks using fake websites, emails, and social media accounts to trick users into claiming a fake airdrop. This usually entails convincing users into connecting their wallets to malicious smart contracts or sharing their private keys in order to claim the ‘airdrop’, after which the wallet is drained of all its holdings.

Key Takeaways

• In crypto, airdrops are marketing programs that incentivize cryptocurrency enthusiasts to support a project or reward them for their past contributions to the project or related projects.

• Foul players exploit the excitement of cryptocurrency investors to benefit from airdrops in order to trick them into granting wallet access through airdrop scams.

• As airdrops get more lucrative, airdrop scams also get more rampant and sophisticated, from fake profiles to fake websites and phishing emails.

Airdrops appeal to cryptocurrency investors and enthusiasts with the promise of a free reward, where all they have to do is interact with the protocol for the promise of free tokens once the token launches. The promise of airdrops draws new investors to pursue airdrop hunting, but it also gives rise to airdrop scams that trick investors into connecting their wallets to malicious applications and sites that then drain their wallets of all assets. 

What Are Airdrop Scams?

Airdrop scams are built around fake airdrops that don’t exist and are not endorsed by the protocol’s team. But they are more than just this. Airdrop scams are also attempts by scammers to exploit the willingness of investors to participate in incentivization programs, exposing them to security threats that usually result in their wallets being drained.  

In this case, it’s usually a scammer posing as a legitimate protocol or influencer, promoting a fake airdrop portal that requests users to connect their wallets for the airdrop. Usually, these websites look authentic at a glance, matching the real site’s visuals. It may even request for a user’s private key or seed phrase. However, once users connect their wallets to claim the ‘airdrop’, they get an error message, and the contents of their wallets are now transferred to the scammer.

How Do Airdrop Scams Work?

As mentioned above, airdrop scams rely on disguising themselves as a legitimate site to trick investors into dropping their guard and approving wallet permissions (or even sharing their seed phrase). 

Besides promoting a fake site on social media, investors may also encounter airdrop scams when they discover that they have received new tokens (which they didn’t buy), and when they go to a block explorer like BscScan to find out how they got their tokens, they see an error message that attempts to direct them to another site to ‘claim’ those tokens before they can access them. 

Source: https://bscscan.com/tx/0x88e89231b292d4eaae45f84f2f1118841b64a0fc6e71fc5d7a8d55fc8eb0940d

Upon visiting the fake site, users might get phished into entering their seed phrases, which gives scammers control over their entire wallet. Alternatively, users may approve the transaction request that pops up on their wallet once they enter the site without reviewing the full details, giving the page access to unlimited token approvals. Token approvals are usually used by dApps to access and move tokens on your behalf, and even legitimate DeFi protocols may request access to unlimited number of tokens to minimize the need for users to re-approve access to the token every time it’s used. However, once you’ve granted a malicious site access to unlimited token approval, you’re actually giving the site permission to take your tokens, instead of giving you tokens. 

Examples of Airdrop Scams

Let us explore some common airdrop scam strategies and what they entail.

Fake Profile Marketing Airdrop

Celestia just ran an earndrop program, and the launch of TIA has also sparked off a flurry of fake profiles that promise users a final shot at the TIA airdrop. In the screenshot below, a scammer has created a fake profile that looks similar to the real one (although the handles are different: calestiatoken vs. CelestiaOrg).

In this case, potential investors are lured to promote an account or project using fake promises. 

To promote the account, they announced a 10 million TIA token airdrop to 1,200 users who  retweet the post and share their ETH wallet address. By this, the account gains viewership and an overall growth in relevance. It is also potentially the first step in an airdrop token claim scam, where the 1,200 accounts will receive a certain amount of tokens, but in order to retrieve them, they’ll have to connect their wallet to a site. 

This is an outright scam as Celestia isn’t even an Ethereum-based token. Users are unlikely to get the promised rewards and even if they do, the worth is likely below their expectations. 

Impersonation Of Popular Accounts

Another example is one where the scammer copies the appearance of a popular account and attempts to scam unsuspecting investors by promoting fake airdrops. 

The screenshot above shows two accounts, a fake one and the original account. The difference between the appearance can only be detected on close examination of the handle (OilimqioCrypto vs. OlimpioCrypto), and if you look carefully, the fake’s profile picture is framed with a circle while the real account’s profile picture is framed with a hexagon.

The fake account also puts out a tweet with a link similar to the website controlled by the original account. Note the difference between earndrop.io which is the website and eansrdrop.io, the fake website. However, unlike the original website, where registered users have to paste their wallet addresses to find unclaimed airdrops, the fake website immediately prompts a wallet connection. And according to Olimpio, once the wallet is connected, the website scans all chains and detects tokens.

Always check the website address before you connect your wallet and never automatically connect your wallet to any site. 

This scam utilizes the reputation built by Earndrop and Olimpio around airdrops, featuring scam websites and malicious emails that look identical to the original at a glance. According to reports by the genuine account, this has been used to hack into investors’ wallets and steal their crypto assets, and even experienced investors have fallen prey to this phishing scam.

Highly sophisticated actors have been exploiting & attacking Earndrop and Olimpio for months.

Meanwhile, hundreds of users were (unfortunately) drained. Punks, ETH, USDC.

Here I share what we’ve been doing, what they do in retaliation, and how as a user you can protect yourself pic.twitter.com/MfeIpx6RCx

— olimpio (@OlimpioCrypto) October 31, 2023

Fake Airdrop Claim Websites

Many airdrops require investors to verify their eligibility through their wallets to claim their share of the airdrop. Meanwhile, fake airdrops also create fake claim websites, where the names look similar to the real site. 

For instance, the picture above shows two claim websites for the Celestia airdrop. While the website addresses are significantly different, investors who have no knowledge of the original website could fall prey to the fake website that leads to a phishing website, which will then either prompt them to connect their wallet or request for their seed phrase. 

Fake Token and NFT Airdrops

Apart from fake NFT claim sites that scammers use to hack into NFT investors’ wallets, another example is one where the fake airdrop operator sends a fake airdrop to users’ wallets with details on an airdrop and how to claim them.

In the above screenshot, you can see that the names are very similar to the tokens they are supposedly airdropping, although they all feature typos or similar names.. As in the case of fake token airdrops, you could also find some of these NFTs in your wallet. The NFTs have zero value and are only a vehicle to pass on the message of the fake win and claiming process.

How To Avoid Airdrop Scams

With the growth in airdrop scam strategies, there is a need to always be on the lookout for these programs and avoid them. Here’s how you can protect yourself from these scams. 

Do Your Own Research On The Airdrop

Airdrops aren’t secrets; after all, the protocol’s goal is to drive adoption and attract users. Therefore, for every airdrop, there is plenty of information available on the internet, from legitimate websites to social media platforms. 

So before jumping on the airdrop offer, consider taking some time to research on the airdrop requirements, the project, and other investors who are participating in it or talking about it. Always use official sources as much as possible, and only interact with the protocol after confirming the site address (look out for typos). 

Airdrop programs that require you to send any kind of crypto asset before being able to claim airdropped tokens are highly suspicious. This does not include common airdrop tasks like depositing assets with the protocol, or engaging in swaps. 

Your findings will also decide if you simply need to apply risk management strategies while participating in the airdrop program, or if you need to stay away from it.

Verify The Information Source

As we discussed earlier, foul players can create accounts and websites similar to those of genuine projects and use them to spread misinformation on malicious airdrops. Airdrop scams like these are meant to lure investors who don’t verify sources of information before taking the plunge. 

On close examination, you can detect the difference between the genuine profile and the fake one, as the fake profiles and sites usually feature typos. Also, research on the individuals promoting the airdrop, and confirm that they are who they claim to be. While it’s recommended to use these influencers as a source of information, it is not enough to label an airdrop ‘legit’, and the onus is still on you to do your own research.

Never Enter Your Private Keys Or Recovery Phrases

Any airdrop, giveaway program or any program at all that requires you to enter your private keys and seed phrases is an outright scam. Your private key and recovery phrase should be known to you only, and stored offline on crypto steel. Never enter this information on any website, as no legitimate app will ask you for your private keys; this isn’t limited to airdrops but includes every other crypto interaction.

Only Connect Your Wallet On Real Sites

Some airdrops require you to connect your wallet, sign messages, or claim your rewards directly to your wallet. Some others require you to simply enter your wallet address. While the latter might appear less risky, it still calls for you to verify that it is real. And if the token appears in your wallet but is accompanied by an error message that prompts you to visit a site in order to claim it, it’s likely to be a scam.

In all cases, examine the platform carefully to ensure that you are interacting with the correct platform. Note that the fake website usually has the exact appearance of the original website, and the giveaway is usually a typo in the website’s URL.

Final Thoughts

While airdrops are real, airdrop scams are equally real. Sometimes it is hard to differentiate between legitimate and fake airdrops, with even experienced investors falling prey to these. However, in many cases, fake airdrops have telltale signs, where the giveaway is usually in the domain name. We have shared some known cases but also admit that airdrop scams take many more forms and this list is not exhaustive of the forms these scams could take. 

In any case, the simple act of thorough verification could save one from most of these scams. Also, employing risk management strategies in any case could ameliorate the losses should you fall prey. The recommended safety strategies only lessen the chances of falling prey to airdrop scams but don’t ensure 100% safety; therefore risk management should be applied at all times. Having said this, note that this article is only for educational purposes and not financial advice.

https://www.coingecko.com/learn/pol-polygon-ecosystem-token-polygon-2-0

Overview of POL

POL (Polygon Ecosystem Token) is designed to gradually replace the current MATIC token over 4 years, as part of Polygon 2.0, where Polygon evolves into a Polygon zkEVM validium with its own network of interoperable application specific blockchains. POL will come with added utility including restaking, where validators can restake their POL tokens to secure other chains in the Polygon supernet and earn additional rewards. 

Key Takeaways

• According to the specifications of Polygon 2.0, Polygon is transforming its products to integrate zero knowledge technology and evolve into a full-suite scaling solution for the Ethereum blockchain.

• This includes restructuring the Polygon PoS chain into a ZK validium Layer 2 network for the Ethereum blockchain and building a supernet architecture to power a hub of ZK L2 networks operating in a uniform ecosystem with an efficient interoperability design.

• This upgrade will also see the MATIC token mature into the POL token with significantly improved utility to reflect the expanded ecosystem, such as restaking.

In a statement released on October 25, 2023, Polygon announced that it has deployed the contract for the POL token on the Ethereum blockchain.

The POL token upgrade is now live on Ethereum mainnet.

Polygon 2.0, released this summer, is a roadmap for scaling Ethereum to build the Value Layer of the Internet. POL unlocks that future.

POL is a next-generation token that can power a vast ecosystem of ZK-based L2 chains.… pic.twitter.com/gmrsu0ZqLz

— Polygon (Labs) (@0xPolygonLabs) October 25, 2023

This is a significant step towards a more extensive set of development as part of the Polygon 2.0 upgrade. The POL token is set to power the elaborate ecosystem being designed by the Polygon development team and its community, and will eventually replace MATIC. So, what is the POL token about?

What Is The Polygon Ecosystem Token (POL)?

The Polygon Ecosystem Token (POL) is the new native token of the Polygon ecosystem. By design, it is being integrated into the core operations of major Polygon products and applications in the ecosystem. POL is meant to eventually replace the MATIC token, taking up its roles around governance and gas, in addition to other utilities that will accompany the expanding Polygon ecosystem. 

Polygon claims that POL is a technical and economic upgrade to the MATIC and is adjusted to be future-proof, where the POL token is adjusted (on the technical end) to be capable of scaling alongside the whole ecosystem as it evolves. POL will improve ecosystem security and scalability as validators can secure multiple chains, offering the Polygon ecosystem support as the industry grows. 

Based on the POL whitepaper, the initial supply of POL will be 10 billion tokens, which is dedicated for the migration of MATIC to POL. In the future, POL will be emitted as validator rewards at a predefined, deterministic rate that cannot be increased beyond 1%; however, it can be decreased after 10 years through governance once the Polygon ecosystem reaches maturity. Once the Polygon ecosystem matures, the team believes that transaction fees and other incentives secured by validating Polygon chains will generate returns for Polygon validators, hence the proposal to eventually reduce the emission rate.  

Now, let’s look at how POL will play a part in this expanding ecosystem.

Utility of the POL Token

Polygon described the POL token as a ‘hyperproductive’ token to reflect the extended benefits it gives holders. The POL token will be the native token of the Polygon ecosystem, and it will be available to operate as the tax currency of the Polygon network or any other network in the ecosystem. 

This means that for every network that chooses POL as its gas token, fees for transactions on the network will be paid in the POL token. 

In addition, the POL token will help in nurturing the security, economy, and management of the polygon ecosystem through

Restaking

Restaking is a generally new concept in cryptocurrency, which was popularized by EigenLayer, where ETH can be restaked to secure other protocols, saving them the trouble of establishing their own validator sets.

On Polygon, POL stakers will secure the network and receive rewards for their efforts. After staking a specified threshold amount of POL token to run a validator node, the consensus algorithm gains an avenue to affirm the validator’s commitment to protecting the network and also a way to ‘punish’ defaulting validators. As an incentivization system, validators are rewarded with POL tokens for securing the network.

And here is where restaking comes in. As the native token for an extended ecosystem, the POL token will also power the security of other chains that will operate under the Polygon supernet structure. This means that validators on the Polygon network can also validate other chains. Validators will earn rewards from the transaction fees generated on the secondary networks they validate, and extra rewards may also be awarded to the validators as specified by the network they validate. 

Polygon also expands the roles of validators. In addition to the normal transaction validation process, validators in the Polygon can also assume other roles like being a part of the Data Availability Committee (DACs) and generating zero knowledge validation proofs. Validators can perform these roles in a single chain or multiple chains in the supernet.

Governance

Polygon also announced that the POL token also accords governance rights to their holders. This means that every holder of the token will be able to decide on community proposals. While Polygon has yet to publish the full design of the governance system at the time of writing, the governance system is expected to operate in a pattern similar to most DAOs.

The POL token will be accepted in project voting portals and each holder will be able to cast a vote for or against a proposed development concerning the project; this could be in areas related to technology, administration, or finance. The community voting system also means that a majority vote confirms the choice of the community and becomes a standing decision. This will become clearer when the project releases the full design of the governance structure.

Polygon 2.0: Powered by ZK technology

On June 20, 2023, the Polygon Labs team published a proposal to transform the Polygon PoS chain into a full zkEVM validium network. The Polygon PoS chain has emerged as one of the most used EVM networks, with over 482 protocols and over $750 million in TVL according to DefiLlama.  

The Polygon views upgrading the current Polygon PoS as a way to improve its security model, as by tapping into zkEVM technology, Polygon will be able to inherit the higher security of Ethereum. The proposal also claims that the move will draw the project closer to solving the current consensus issues and the fluctuation in the efficiency gas estimation model which leads to occasional spikes in transaction fees and enables it to pursue an overall improved user experience.

What Are zkEVM Validiums?

ZkEVM validiums are an alternative to rollups when it comes to implementing zk-powered Layer 2s. Zk-powered L2s submit validity proofs to the Layer 1 (Ethereum), providing security guarantees for all its transactions. However, unlike rollups, which submit compressed transaction data to Ethereum, validiums do not publish transaction data to Ethereum, instead guaranteeing the availability of this data in another way. 

This enables zkEVM validiums to offer lower fees, as it doesn’t require blockspace on Ethereum to store transaction data, and also improved scalability, since a rollup’s throughput is limited by the amount of transaction data Ethereum can store. 

As Polygon already has a decentralized validator set with $2 billion at stake with Polygon PoS, it can serve as a highly reliable transaction data availability layer. 

The proposal also claims that the shift from PoS to a zkEVM validium is also a preparatory process for the Polygon 2.0 upgrade. As a zkEVM validium network, the Polygon PoS chain will become compatible with the supernet structure being developed, this will enable it to enjoy the benefits of being a part of the hub.

Polygon 2.0 Supernet Structure

Polygon claims to be putting every effort made towards the creation of an efficient value layer through decentralized technologies in the past decade together in the Polygon 2.0 upgrade. It hopes to reflect these developments in Polygon 2.0 which defines a new structure for the project. 

With the Polygon 2.0 upgrade, Polygon will transform into a supernet of ZK networks operating in an effectively interoperable system and sharing valuable resources between them. It defines a uniform security system and a final settlement on the Ethereum blockchain using ZK provers to ascertain the validity of transactions and achieve near-instant finality.

Now, let’s look at some of the features of Polygon 2.0.

Features of Polygon 2.0

The Supernet is a network of networks. Polygon hopes to build the ‘value layer of the internet’. The basis of the design is to achieve a foster system for multiple ZK Layer 2 networks and achieve near-instant finality on the Ethereum network. Here’s the underlying structure of Polygon 2.0.

Protocol Architecture

Polygon 2.0 is made up of four layers that operate in synergy to deliver a compact system of networks in mutual communication; the four layers are

• The Staking layer

• The Interop layer

• The Execution layer

• The Proving layer.

The Staking Layer

Polygon 2.0 adopts the proof of stake consensus algorithm. The staking layer is the core of the network’s security system. It handles the core aspects of the network’s validator staking and validator management. Polygon 2.0 validators are required to stake the network’s native token to run a validator node on the network. Polygon claims that the staking layer will be optimized for the normal staking and the restaking model as well. The staking layer is controlled by two smart contracts deployed on the Ethereum network; the Validator Manager and the Chain Manager.

The Validator Manager smart contract handles the ‘inventory’ aspect of the validators. It processes staking and unstaking requests, and keeps a count of validators on the network. The Validator Manager handles the restaking process, and also processes slashing events when they occur. Through this portal, validators can select a secondary network to validate.

The Chain Manager is an administrational smart contract; it defines the number of validators needed by a network for decentralization and delineates the conditions to run a node on the network and also defines punishments for defaulting validators.

The Interop Layer (Interoperability Layer)

This layer handles the intercommunication of networks in the supernet. Polygon claims to be developing a specialized communication system powered by a modified version of the Message Queue algorithm currently used by the Polygon zkEVM rollup. Using Message Queues and ZK proofs, the Polygon ZkEVM is able to send messages across networks seamlessly. Polygon claims that the interop layer upgrades this design massively through the Aggregator. The aggregator mediates between the Ethereum network and networks in the Polygon 2.0 supernet. It compiles zk Proofs from these chains and submits them to the Ethereum network.

By submitting the proofs to Ethereum, messages in the queue are transmitted as soon as the batch is verified on Ethereum. This way, the aggregator is able to establish an efficient communication pathway between the chains and the Ethereum network. Native assets on the Ethereum network can be transferred to the Polygon chains seamlessly. The validators in the staking layer also take up the duty of protecting the interoperability layer.

The Execution Layer

The execution layer is just like any other execution layer. It consists of a consensus system operated by the validators that screen transactions before adding them to the block. Validators obtain details of transactions from the mempool and reach an agreement over the validity of the transaction. Once a consensus is reached, the transaction’s data is stored and this layer also generates the witness data to be used by the ZK prover. Refer to this article on rollups to learn how the ZK validity proof uses a witness to prove transaction validity.

The Proving Layer

The proving layer generates proofs for transactions executed on the network. It is made up of the common prover, the state machine, and an optional state machine constructor. The state machine constructor is a framework for building state machines that allows networks on the supernet to design their own state machines tailored to their needs. It is a modular framework and therefore brings in some flexibility. Networks are able to select components of their proving machine as they wish. The state machine then handles the generation of transaction proofs for the network.

The common prover is designed to easily adjust to any state machine defined by the networks in the supernet. It uses a single-proof system to query the correctness of the transaction data before they are submitted to the main network. The common prover completes the system and makes a case for the existence of different forms of ZK networks in one supernet. Its ability to adjust to custom-made state machines and transaction types ensures that every network’s transaction data gets assayed properly.

Polygon CDK

Developing a zero knowledge Layer 2 network is certainly a complex and technical feat. To cut down on these complexities and ensure that developers launch ZK networks that align with the design of the Polygon supernet, Polygon will introduce the Polygon CDK (Chain Development Kit). The CDK is a codebase for launching ZK L2s on the Supernet. It is an open-source framework that can be adopted by developers who wish to launch networks on the supernet. Networks developed using the CDK are in fact Ethereum L2 networks with the principles of Polygon 2.0. Polygon claims that these networks inherit the security, and decentralization provisions of the Polygon 2.0 and automatically become a member of the supernet. They benefit from the interoperability of the system and share resources (including the liquidity layer) of the supernet.

The Polygon CDK is modular, which means that developers have a high level of freedom in the selection of their network’s components. 

What Happens To The MATIC token?

In short, the POL token will be replacing the MATIC token. MATIC has served as the native token of the project since its inception and has gone through a couple of soft rebranding over these years. It has also seen extensive ownership thanks to the widespread adoption of Polygon and its projects. As shown on-chain, the MATIC token is held by over 600,000 cryptocurrency investors. However, the upgrade to the POL token is the biggest update the token has witnessed since it was launched. This upgrade will see the whole Polygon tokenomics moved to a different smart contract to allow the token to operate within its new scope as desired. Like MATIC, the total supply of the POL token is 10 billion. The initial circulating supply is expected to be the same as the circulating supply of the MATIC token by the time the phase-out process starts.

As part of the phasing-out process for the MATIC token, MATIC holders will need to run a swap transaction to transfer their old MATIC token to the upgrade smart contract. MATIC will be swapped to POL token in a 1:1 ratio. According to Polygon, the phase-out process will last for over 4 years, which will provide enough time for every holder to move their token to the new contract. When this is done the MATIC token will cease to exist. Therefore, as a MATIC holder, it is recommended that you stay up to date with new developments regarding this and complete your token swap within the specified timeline.

Final Thoughts

Polygon is going big into the ZK and Layer 2 technologies; it is quite understandable why they are taking the technology through this route. This is also in line with their original goal of scaling the Ethereum network. The Polygon PoS chain has served for a while and has seen quite a significant adoption during this time, becoming one of the most used POS EVM networks. This new development is one to look out for as it will probably change the landscape for decentralized applications and other smart contract projects in the Polygon ecosystem. Not just the technical side, the economic aspect of the project is also due for a change, especially with restaking. The new POL token will cover everything that is being built on the expanding ecosystem, beyond the utility of the original MATIC token.

Polygon leaning towards the ZK technology is also a significant one for the ZK paradigm and the development of the technology. Over time, we will see how this system develops and how it affects blockchain enthusiasts and investors. It is also important to note the technical volatility associated with new systems and apply caution where due. Also, note that this article is only for educational purposes and not be taken as financial advice. Always do your own research before investing in any tokens and protocols.

https://www.coingecko.com/learn/sim-swap-attack-crypto

How to Avoid SIM Swaps in Crypto

SIM swaps occur when a hacker hijacks a phone number, thereby gaining access to accounts that depend on a phone number for authentication and account recovery. You can avoid SIM swaps by opting for authenticator applications over SIM-based authentication where applicable, and avoiding depending on your phone number as your sign-in and recovery method.

Key Takeaways

• Cases of SIM swaps leading to significant financial losses are on the rise in the crypto space.

• SIM swap hacks in the crypto space have led to significant effects for affected users and even the larger cryptocurrency community. A notable instance is Vitalik Buterin’s Twitter (X) account hack.

• In SIM swap hacks, the hacker gains access to the victim’s SIM card and re-routes messages going to the SIM to their own device. This allows them to gain access to the victims’ internet profiles and applications including crypto wallets.

• In this article, we explain how this works and some precautionary measures that can be taken to reduce the risks of falling prey to SIM swap hacks.

The American Federal Bureau of Investigation (FBI) released a statement on February 8, 2022, detailing the recorded losses from SIM Swap hacks in the US in the year 2021. An estimated $68 million was lost in reported SIM swap hacks in the US alone. SIM swapping has been around for a while with cases recorded as early as 2017 according to Chainsec. However, this has escalated since then, as the $68 million loss in 2021 alone represents an over 400% increase in recorded losses when compared to three years earlier (2018-2020), where losses totaled $12 million.

In the crypto space, some of the most popular and ‘lucrative’ hacks of 2023 have been traced down to cases of SIM swap. So, what are SIM swap hacks?

What Are Sim Swap Hacks and How Do They Affect Cryptocurrency Investors?

SIM swap hacks are known as port-out scams, SIM splitting scams, or SIM hijacking scams. These hacks happen when a foul player routes connections to a victim’s SIM card to another SIM card which they are in control of. This redirects messages, calls, and every relevant communication meant for the victim to the hacker, including 2FA SMS notifications. On some platforms, the phone number alone is sufficient to reset an account’s password, regardless of 2FA measures implemented.

While this may seem like a simple breach in electronic communication, the hackers use this access in several ways which are highly debilitating to their victims and other people connected to them. 

Stealing Cryptocurrencies and Other Assets

In the crypto space, a successful breach of an investor’s SIM card can allow the hacker to gain access to user accounts on centralized exchanges and other financial accounts that are protected by 2FA SMS verification or other account recovery methods that use the victim’s phone number. Once the hacker gains access to these accounts, they can siphon available funds from their victims’ accounts, 

Hijacking Social Media Profiles

Apart from gaining access to user accounts with direct financial relevance, SIM swap hackers can also intercept the user’s social profiles using the same strategy and initiate harmful communications with their connections. For popular or influential personalities, this puts their audience at risk as well. In some cases the hackers share phishing links through these accounts to target unsuspecting followers. 

These links usually promise a giveaway, leading users to platforms that request for users to connect their wallets and sign a transaction. This allows the hacker to interact with the user’s wallet and drain the victims’ wallets.

How Do SIM Swap Attacks Work?

SIM swapping is a social engineering-based hacking technique, just like most hacking strategies. After all, it is significantly an easier way for a hacker to socially engineer their way into users’ accounts, when compared to traditional hacking strategies like brute-force attacks, where hackers try to crack a password by trying as many character combinations as possible. 

For a successful SIM swap attack, the hacker simply needs to convince the telecommunications service provider that they own the victim’s SIM card and wish to port the SIM’s communication to another SIM card that is provided by them. The service provider only requests some personal information from the hacker to execute the SIM swap. If the hacker is able to provide the requested personal information of the victim, the service provider proceeds to port the number as requested. Popular information asked before performing the swap includes the client’s maiden name, work history, birth information, and family data.

Hackers can obtain this information through social media, stolen files, and data extraction techniques that utilize malicious mail or applications that install malware on the victim’s device and scan for data from the clipboard and other means. This is why some SIM swapping cases in the crypto space are connected to decentralized applications where users share their personal information as seen in friend.tech – a social finance (SoFi) platform on the Base network.

Once the hacker swaps the SIM successfully, they exploit vulnerable user accounts. Vulnerable accounts in this case include any user profile protected by security methods based on the SIM card. This could be SIM-based 2-factor authentication, or accounts where the link to reset user passwords is sent to the user’s SIM card. Considering that many emails are protected by SIM card-based security methods, the hacker could also gains access to the user’s email and expands their reach.

Examples of SIM Swap attacks

Here are some known instances of SIM swap hacks that have impacted the crypto space in recent times.

Vitalik Buterin’s Twitter Account Hack

Even a crypto investor who isn’t interested in NFTs would rush to claim a free NFT offered by Ethereum Founder – Vitalik Buterin. This was the strategy SIM Swap hackers employed when they successfully gained access to the Ethereum Founder’s Twitter (X) account on September 9, 2023. 

The link which directs to a malicious website promised investors a claim on a commemorative NFT issued in partnership with Consensys – the MetaMask wallet development team. To claim the NFT, users will need to connect their wallet to the platform. Connected wallets were drained of their valuable crypto assets including NFTs and other fungible tokens. Despite attempts to alert investors early enough, losses continued to rise. Crypto investigator ZachXBT reports over $690,000 in stolen assets, over 70% in NFTs.

Update: $691k drained (another 33% in drainer fee address) pic.twitter.com/AVIShqDlMU

— ZachXBT (@zachxbt) September 9, 2023

Sequel to the attack, Vitalik Buterin confirmed that the breach was due to a SIM swap attack on his T-Mobile account. The said malicious Tweet has since been deleted.

Friend.tech

Decentralized social media platform friend.tech has been the subject of repeated SIM swap attacks in the early weeks of October 2023. The platform operating on the Base Layer 2 network allows users to create accounts by connecting their Twitter profiles. Some of the earliest reported SIM swap hack cases connected to Friend.tech came at the end of September 2023. 

got swim swapped for 20+ ETH (they drained my https://t.co/xb5o31p3Yy)… stay vigilant out there bros

set a PIN on your sim even if you don’t think you need to

— froggie.eth 🐸🦉 (@brypto_) September 30, 2023

Affected users reported up to 20 ETH in losses. New cases continued to emerge, going into October. As tracked and reported by ZachXBT, the SIM swap hacker netted assets in the excess of $385,000 in stolen crypto assets.

The same scammer profited $385K (234 ETH) in the past 24 hours off SIM swapping four different FriendTech users. pic.twitter.com/03BoBEqGax

— ZachXBT (@zachxbt) October 4, 2023

Responding to the hack, friend.tech has implemented improved security fixes to protect the platform from more losses, like adding a 2FA password to friend.tech accounts as an additional layer of protection. 

Michael Terpin

Aged just 15 at the time, Ellis Pinksy SIM swapped Michael Terpin and stole over $23 million worth of crypto assets. The event which occurred in 2018 would result in a slew of lawsuits from the renowned entrepreneur against everyone involved in the hack, including AT&T, Michael Terpin’s network provider. Terpin sued the network provider for $220 million: $20 million to cover the direct losses and $200 million for extra damages. While the service provider was able to win the court case and avoid paying these charges, Terpin went ahead with further lawsuits including one against Elvis Pinksy when he turned 18 in 2020.

Recorded history of the hack reports that the teenager was just a front to an even bigger social engineering hacking gang that used underage individuals and telecommunication company staff to gather key information about their target. According to the report, Pinksy had developed a Python application that scrapped social networks in search of contact details of telecommunication workers. Pinksy and his crew would proceed to contact the worker and attempt to bribe their way to receive handy information on targets. Terpin’s case was an example of the involvement of telecommunication workers in cases of SIM swap hacks.

How to Avoid SIM Swap Hacks

The growth in cybersecurity strategies is complemented by relative growth in cyber attack strategies by foul players who are dedicated to detecting shortcomings of set-ups and exploiting them. From known cases of SIM swap hacks, here are some things you can do to reduce your chances of falling prey to these hacks;

Use Authenticator Applications and Avoid SIM Card-Based Authentication

Most internet platforms now offer authentication as an extra security measure. This involves using unique codes to verify user requests such as logins and withdrawals. The unique codes are either sent to the user’s email, mobile number or obtained using Authentication applications like Google 2-Factor Authentication application and Authy. Most platforms allow users to choose their authentication method. 

Due to the prevalence of SIM swap hacks, selecting mobile numbers as the medium for receiving authentication codes could expose the user to losses in case their SIM gets swapped. Emails could suffer the same fate as well. While Authentication applications have their own risks, using them for your account authentication means that your security is attached to your device and not your SIM card. This reduces the risk of running into losses from SIM swap hacks.

Use MFA (Multi-Factor Authentication) Where Supported

Beef up your profile security by using Multi-Factor Authentication (MFA), where users are required to enter additional information on top of their password. While this might not be available on every platform, endeavor to employ multiple verifications for key operations where possible. 

This might make signing in a bit of a hassle, but it keeps your account safe in the event a hacker breaches the first security parameter. In addition to your password, consider adding one or more authentication processes including biometrics. 

When setting up your authentication strategy, consider combining your password with an application-based authentication method and an inherence authentication method like fingerprint scans as well. As advised, consider avoiding SIM card-based authentication.

Avoid Using Your Phone Number as a Sign-in and Recovery Method

Many platforms allow users to create accounts by providing their phone numbers and a password. Even though emails have replaced mobile numbers for this purpose, platforms still retain this method as an option. Where this is the case, it is advised to opt for the email option. 

Providing a mobile number attaches the account to your phone number and makes it an easy target for SIM swap hackers. Also, while choosing a recovery method for your account, avoid using your mobile number as the recovery method for the same reason. 

Don’t Doxx Yourself

Doxxing is the act of making personal information public, usually by an unauthorized person. However, someone could also doxx themselves. This is as easy as claiming a previously anonymous profile. Users who doxx themselves reveal key information and proof of ownership of the accounts they are laying a claim on. Considering that SIM swaps are products of social engineering, any accessible personal information makes one more vulnerable to SIM swap hackers.

As a cryptocurrency investor, your wallet address has inherent privacy as transactions are not attached to a personal name, but when you finally doxx yourself and prove ownership of a known cryptocurrency address, smart contract, or project, this makes you a subject of hack attempts, this exceeds the premise of SIM swaps and extends to even more advanced attacks, mostly through social engineering, either directly or indirectly.

If possible, it is advised to maintain anonymity to a significant extent and avoid sharing personal details online, including your crypto wallet address. If you must doxx yourself, it is important to understand the risks and apply risk-management strategies to keep you safe.

What to Do if You Are the Victim of a SIM Swap Attack

Unfortunately, recommended prevention strategies only reduce the risks of getting hacked through SIM swaps and don’t totally get rid of them. SIM swap hack could happen to anyone, regardless of the measures taken, in case you suffer a SIM Swap attack, here are what you can do to salvage the situation;

 First, confirm that your SIM has been swapped. The earliest sign of a SIM swap attack is that your SIM becomes unable to make calls, send messages, or receive any of the two. Quickly test out these two operations to strike out the chances of a network outage.

However, in a case where you are unable to detect the swap on time and are already being attacked, first, move to salvage your asset by moving your crypto assets from exchanges to your cold wallet and changing the authentication details of unaffected accounts. If possible, contact the affected platforms to halt operations on your account and track the movement of your funds. The recommended security infrastructure to use here is a cold wallet since the hackers might also gain access to your hot wallet.

Contact your service provider to disconnect your line, which might take some time. In the meantime, continue to salvage what assets you can while you wait for your provider to respond.

When this is done and the dust settles, it is important to analyze the situation and undertake precautionary measures to avoid a repeat. Also, explore means to recover stolen funds. Depending on the amount stolen, more extreme measures such as offering a bounty on the hacker and resorting to lawsuits like the case of Michael Terpin could also work.

Final Thoughts

The mobile SIM card is a gateway to unlimited personal information and this is why SIM swap hacks are troubling. We have discussed possible ways cryptocurrency investors can stay safe from threats and also manage a case of SIM swap hack. 

Even if you’ve never been SIM swapped, it is still a good idea to protect your accounts based on the steps outlined above. Also, when you see a popular personality promoting a giveaway or an offer that sounds too good to be true, do your own research before connecting your cryptocurrency wallet to any linked platforms. 

Finally, note that this article is for educational purposes only. Always do research on the impact of implementing any security measures to your accounts. 

https://www.coingecko.com/learn/what-are-pudgy-penguins-nfts

What Are Pudgy Penguins?

Pudgy Penguins is an NFT collection featuring 8,888 unique cartoon NFTs featuring cute penguins. Each penguin has 4-5 traits ranging from background color to outfits and accessories, representing values like love, happiness, compassion, and empathy.

Key Takeaways

• Pudgy Penguins is a collection of unique 8,888 cartoon NFTs featuring adorable penguins developed from 150 hand-drawn traits. Besides Pudgy Penguins, there are also 22,222 Lil Pudgys that form part of the Pudgy Penguins ecosystem.

• Pudgy Penguins NFT was launched in 2021 by Twitter (X) user ColeThereum and three other friends. However, their leadership of the project was cut short when the project was acquired by Luca Netz in 2022 following a community outburst against the creators due to failure to meet promised developments and cash grab allegations.

• Under Luca Netz’s ownership, Pudgy Penguins has continued to operate and grow its community and ecosystem, most recently releasing a line of Pudgy Toys that is available on major retailers like Walmart and Amazon.

At the time of writing, CoinGecko reports a floor price of about 5.4 ETH for the Pudgy Penguins NFT. Pudgy Penguins occupies the fifth position in the NFT projects ranked by total market capitalization, and the collection boasts a daily trading volume of around 120 ETH. 

Pudgy Penguins basks in its vibrant community of almost two million cumulative followers across multiple social media outlets. Pudgy Penguins is a PFP (picture-for-profile) NFT series, similar to other projects like Bored Ape Yacht Club (BAYC) and CryptoPunks. Now, let’s look more at what Pudgy Penguins are, and why there’s so much hype around them. 

An Introduction to Pudgy Penguins

Pudgy Penguins is a collection of 8,888 unique cartoon artworks featuring penguins. Each Pudy Penguin NFT possesses unique traits and rarity. The Pudgy Penguins NFT artworks were developed from 150 hand-drawn traits. Distinctive features are spread across each NFT’s clothing (shirt, glasses, and hats), body (face, skin, and head), and background. This design is meant to give each Penguin a unique look. 

Each Penguin NFT is valued according to its appearance, rarity, and demand. The costliest Pudgy Penguins NFT to date is #6873, which fetched over $640,000 (400 ETH) in its most recent sale in August 2022, and previously went for $788,000 (225 ETH) in September 2021. So what makes #6873 so special?

Only 2.8% of the collection boasts only 4 traits; the remaining 97.2% have five traits. #6873 also has a green background, black skin, and a mirrored body, all of which occur in just 1 Penguin (0.01%). If you’re looking to trade Pudgy Penguins, you can do so on NFT marketplaces like OpenSea, Blur, LooksRare and X2Y2.

Pudgy Penguins are said to be an embodiment of core social virtues; empathy, happiness, compassion, and love. The Pudgy Penguins community has rallied around this symbolism and has maintained the project’s motto “spreading good vibes across the meta” over the years. 

Within the community, Pudgy Penguins NFTs are known as Pengus, and holders are Huddlers (taking the name from a collective of penguins – a huddle). Every Huddler receives a set of privileges for holding at least one of the 8,888 NFTs in the collection.

The proof of ownership and metadata of each Pudgy Penguin is engraved on the Ethereum blockchain, where each Penguin is an ERC-721 non-fungible token minted on the Ethereum blockchain. 

Utility of Pudgy Penguins NFTs

As a Huddler, you’ll be able to enjoy benefits like joining the Pudgy Penguins community, or even use your Pudgy Penguins NFTs and related art for commercial purposes, like promoting your own goods and services. 

Pudgy Penguins holders get to attend exclusive events including online community events, special meet-ups, and real-world events across different cities in the world. The Pudgy Penguins event calendar details ongoing and future events. Notable Pudgy Penguins holders are also invited to podcasts and other communities to discuss and share ideas about the community.

The maiden highlight of Pudgy Boleh was the @mymdec event on 18/9/23, showcasing @pudgypenguins technology, products and vision to Malaysian Government and Business Corporations. This was a strong foundation for collaboration & opportunities in Asia @FoxyPenguinApe @LucaNetz pic.twitter.com/WP1aWtV4aX

— 🅡ay.| Greentrades (@pudgyray) October 22, 2023

In addition, Pudgy Penguins holders can integrate their NFTs into their businesses. Holders can build their business around their Pudgy Penguins NFTs. The project specifies this in the IP rights provision. Business owners who are building their brands around Pudgy Penguins will also receive promotional support from the project and The Huddle if the business aligns with the project’s traditions. However, this business’ annual revenue must be below $500,000. Owners must notify the project within 15 days of their business revenue exceeding this set amount.

In summary, Pudgy Penguins’ utilities are majorly on communal and business (supportive) grounds. However, holders have the freedom to explore extra use cases for their NFTs on grounds such as commercial, marketing or so, provided they don’t breach the legal terms as specified in the IP rights.

The Pudgy Penguins Ecosystem

Apart from the initial Pudgy Penguins NFT collection, other related projects have grown under its hood. These projects make up the Pudgy Penguins ecosystem. Projects in the Pudgy Penguins’ ecosystem include:

Lil Pudgy NFTs

Lil Pudgy NFTs were introduced in December 2021. It is a collection of 22,222 NFTs originally minted on the Ethereum blockchain. Pudgy Penguins holders received a 1:1 airdrop of the Lil Pudgy NFTs and the rest of the minted NFTs were sold in a public sale event. Just like Pudgy Penguins, the Lil Pudgy NFT collection’s art features penguins and symbolizes social virtues as well. According to the project, Lil Pudgys are fierce, and mighty and are allies in the fight against evil bears of negativity.

On January 25, 2023, the Pudgy Penguins team announced that it has partnered with interoperability solution LayerZero to develop multichain availability for Lil Pudgys. Sharing its vision, the team claims that this development is focused on making Pudgy Penguins and its related assets available to even more people. Thanks to this, Lil Pudgys can be bridged across the BNB Smart Chain, Polygon, and Arbitrum networks. Lil Pudgy NFTs have a floor price of 0.4 ETH at the time of writing.

Pudgy Rods

On August 30, 2021, the Pudgy Penguins team released a free to claim NFT featuring eggs wrapped in ribbons without disclosing their contents. After months of speculations about the eggs’ contents, the team revealed on Christmas Eve that the wrapped eggs were fishing rods (NFT). This unfortunately didn’t meet the community’s expectations and caused an escalation of the already existing turmoil that rocked the leadership of the project.

Moving past the unrest, the project has continued to support Pudgy Rods (initially misspelled as Rogs). The project maintains that Pudgy Rods will serve as a multiplier for certain licensing deals, on-chain drops, or claims that might be done in the future. That is, Pudgy Rod owners will be considered for airdrops and multiplier privileges will be introduced for holders of the three NFTs in the Pudgy Penguins ecosystem (Lil Pudgy, Pudgy Penguins, and Pudgy Rods). According to data from CoinGecko, about 7,394 Pudgy Rods have been minted. The floor price of Pudgy Rods at the time of writing is about 0.29 ETH.

Pudgy Toys

Pudgy Toys were announced in May 2023 and are now available in over 2,000 Walmart stores, the NFT project’s store, and Amazon as well. Pudgy Toys are real-life Pudgy Penguins branded and licensed toys. Available items that can be purchased include plushes, figurines, and other toys, with pricing starting from $2.97. 

“Pudgy Penguins is more than just an NFT project – it is a transcendent IP brand that is providing a community of both crypto-native and non-crypto native consumers with enjoyable products, experiences, and content,” said Luca Netz, Chief Executive Officer of Pudgy Penguins. “With the backing of our partners and community, we are excited to create the leading Web3 IP brand of tomorrow, and to introduce Web3 to the public in a simple, seamless way.”

– Lucas Netz, CEO of Pudgy Penguins

Pudgy Toys was employed to introduce the Pudgy Penguins brand to the world outside the crypto space and create a connection, targeting a new audience and enhancing the relevance of the whole project. Pudgy Toys are a gateway to the Pudgy World, a metaverse on the zkSync Era network. Owners of the toy receive a bar code on purchase, and they get to claim their character in the Pudgy World when they scan the barcode. 

History of Pudgy Penguins

Pudgy Penguins has moved over $400 million in cumulative trades, grown into a community of over a million NFT lovers, expanded its ecosystem, and has (relatively) stayed strong during the crypto winter that has affected the whole NFT and crypto market. However, before the project grew to its current height, it was a subject of controversies and breakthroughs, mainly on marketing grounds.

How It Started

Cole Villemain under the Twitter (X) pseudonym ColeThereum created Pudgy Penguins in 2021 alongside three other colleagues. The project was launched in July 2021. According to the original creators, the goal was to create PFP NFTs that embody happiness, community, and other social virtues. The creators backed the initial release with a basket of promises and improvements lined up in the project’s roadmap. Villemain and his co-founders issued the 8,888 NFTs at an initial price of 0.03 ETH.

Pudgy Penguins Controversy

However, following the inability of the founders to meet up with promised developments, widespread FUDs, and allegations of an ongoing rug pull plan, the Pudgy Penguins community voted to oust the founders and proceed with growing the project as initially planned. The NFT floor price slumped to levels below 0.6ETH during the unrest. Villemain and his team were officially removed in January 2022.

Luca Netz Takeover and Pudgy Penguins Recovery

Los Angeles entrepreneur Lucas Schneltzer bought the project for 750 ETH ($2.5 million) in April 2022 after winning the bidding for ownership. Schneltzer revamped the project’s leadership and announced new growth plans. Under the ownership of Luca Netz, Pudgy Penguins has seen a significant recovery in floor price and overall brand image. Pudgy Penguins has also become one of the first Web3 brands to offer major licensing opportunities to its holders. 

Pudgy Penguins’ floor price climbed above 6.9 ETH in January 2023, a record price level according to data from CoinGecko. More recently, in May 2023, Pudgy Penguins completed fundraising for a $9 million seed round, led by 1kx, along with other investors including the founders of LayerZero Labs. 

Final Thoughts

Contemporary NFTs have shone the light on the different fun and technical ways to put the NFTs to use. Pudgy Penguins and similar projects transcend mere PFPs; they are to a large extent, a show of community power and symbolism. When augmented with other advanced technologies like the metaverse, this relevance becomes even clearer. 

The Pudgy Penguins community is likely to continue supporting the project and participating in promotional programs while the community grows with anyone who picks interest in the way the project operates. It is not certain how Pudgy Penguins and similar NFT projects will fare in the future but it will be interesting to see how its core values will be preserved during this time. The project and the community will look to continue growing exponentially under the current management.

Having said this, it is important to understand the scope of an NFT project before investing. Also, note that this article is only for educational purposes and not financial advice. Featuring this project is not a form of endorsement or recommendation.

https://www.coingecko.com/learn/optimistic-vs-zero-knowledge-rollups

Optimistic vs. Zero Knowledge Rollups

Optimistic rollups take an optimistic approach to transactions, assuming that all transactions are valid until proved otherwise, although there is a challenge period where users can submit fraud-proofs around. However, zero knowledge rollups use validity proofs to confirm that every transaction is valid before submitting data to the Layer 1.

Optimistic rollups tend to be faster and cheaper due to lower computation requirements when compared to zero knowledge rollups, although users have to wait for the challenge period to elapse before withdrawals are processed.

Key Takeaways

• Optimistic rollups bundle transactions on the execution layer, assuming that these transactions are valid although there is a challenge period of 7 days for users to submit fraud-proofs if they suspect a fraudulent transaction before transactions are confirmed on the Layer 1. 

• Zero knowledge rollups perform a prior verification on the transaction through zero knowledge proofs before sending them to the consensus layer on the main network for final validation, which offers faster transaction finality.

• While optimistic and zero knowledge rollups offer different benefits and drawbacks, Ethereum founder Vitalik Buterin believes zero knowledge rollups will win out in the mid to long term as zk technology improves.

Layer 2 (L2) rollups are quite popular now as they offer cheaper and faster transactions on the Ethereum blockchain, enabling vertical scaling on the most-used blockchain.

What Are Rollups?

Rollups are a resource-management approach to blockchain scalability. As the name suggests, rollups work by bundling data from multiple transactions on the Layer 2 chain into a single transaction for confirmation on the Layer 1. In an article by Ethereum founder Vitalik Buterin, he mentions how rollups improve scalability while reducing gas fees for users:

“Rollups move computation (and state storage) off-chain, but keep some data per transaction on-chain. To improve efficiency, they use a whole host of fancy compression tricks to replace data with computation wherever possible. The result is a system where scalability is still limited by the data bandwidth of the underlying blockchain, but at a very favorable ratio: whereas an Ethereum base-layer ERC20 token transfer costs ~45000 gas, an ERC20 token transfer in a rollup takes up 16 bytes of on-chain space and costs under 300 gas.”

Layer 2 solutions adopt rollups as a means to scale the main network. Transactions on their execution layer are packaged in batches and each batch is sent to the main network for final validation. This way, they save time and cost for users and maintain the security and decentralization level on the main network by contracting the consensus layer of the mainnet to screen the transactions and add them to the network.

However, rollups differ in the steps they take prior to submitting the transaction data to the main network. This leads us to the two types of rollups currently available: Optimistic and Zero knowledge rollups.

What Are Optimistic Rollups?

There are a few parts to an optimistic rollup. First, as their name suggests, they take an optimistic approach to executing off-chain transactions, where they assume all Layer 2 transactions are valid unless challenged and proven fraudulent. They offer lower fees for end-users, as the fixed transaction costs are spread across the multiple transactions in each batch. 

Secondly, optimistic rollups do not publish validity proofs for transaction batches that are posted on-chain, and only rely on fraud proofs to identify cases where transactions are not calculated correctly. In an optimistic rollup, users who suspect foul play can challenge a rollup transaction by computing a fraud proof during the challenge period (usually 7 days). In the case of a successful fraud proof, the rollup will re-execute the transaction and update the rollup’s state, while the sequencer who included the incorrect transaction in a block will receive a penalty. 

Finally, if there are no challenges to a rollup batch, once the challenge period ends, the batch is deemed valid and accepted on Ethereum, after which withdrawals requests will be released. 

Here are some known networks that operate using optimistic rollups:

Optimism

Optimism launched its mainnet in December 2021. It is a general-purpose EVM-compatible Layer 2 network built to scale Ethereum. It uses the optimistic roll-up technology to improve transaction speed and reduce costs. To verify the validity of batched transactions, Optimism uses a single-round fraud-proof screening to sieve through transaction details and flag inappropriate transactions.

However, at time of writing, Optimism’s fraud-proof system is still in the testnet phase on the Goerli testnet, including three components: a Fault Proof Program (FPP), a Fault Proof Virtual Machine (FPVM), and a dispute game protocol. OP Labs claims that FPP and FPFM, paving the way for the development of multiple proof systems, where building with Optimism’s OP Stack will eventually enable developers to built their own fault proof systems with these components. 

Arbitrum

Arbitrum was launched on August 31, 2021. Arbitrum hopes to scale the Ethereum network using the optimistic rollup technology. Arbitrum is also a general-purpose optimistic rollup network. Arbitrum expands on the security and rollup system on regular optimistic rollup networks. It uses a multiple-round fraud-proof system to thoroughly screen transaction batches. The major technical difference between Arbitrum and Optimism is that Arbitrum uses a multiple-round fraud-proof system while Optimism uses only a single-round fraud-proof system. As of September 2023, the Arbitrum team claims that not a single fraud-proof has been submitted on Arbitrum. That said, fraud-proof submissions on Arbitrum are currently limited only to white-listed actors, although the team claims that Arbitrum’s fraud-proof feature will soon be permissionless, allowing anyone to push for the correctness of the chain when challenges are issued.

Arbitrum also runs the Arbitrum Nova, a sidechain network that future reduces transaction costs by 90%. Arbitrum Nova is notably a cheaper to use network compared to the main Arbitrum network, a chain that is also home to Reddit’s r/cryptocurrency  MOON tokens.

opBNB

opBNB is an optimistic L2 network for the BNB Smart Chain, developed using the OP Stack. opBNB was launched on August 16, 2023, and hopes to support high-performance applications that demand high transaction volumes while boasting intensive daily active users on BSC. To futher bring down the cost of transactions, opBNB leverages BNB greenfield, a blockchain and storage platform, to act as a data availability layer. According to the development team, transactions on opBNB could cost as little as $0.0005.

Zero Knowledge Rollups

Zero knowledge rollups are very much like optimistic rollups in the way they handle transactions in groups and communicate with the consensus layer for final validation. However, unlike optimistic rollups that assume all transactions are valid, zero knowledge rollups subject each transaction to a screening process before they are added to the batch.

Zero knowledge validity proofs are able to conceal the details of a transaction while executing and validating the transaction, offering improved privacy. As the name implies, the parties have no knowledge of the core details of the transaction including the amount transacted and the transacting parties. However, this protocol is able to prove the validity of the transaction to the recipients and the network validators.

The two parties in a zero knowledge proof transaction are the Prover and the Verifier. The Prover is the sender of the transaction while the Verifier is the recipient. The ZK protocol mediates the transaction. The hidden information (details of the transaction) is the Witness.

To prove to the Verifier that a transaction is true, a Prover is meant to answer a question regarding the transaction. The Verifier generates the question (known as the Challenge) and sends it to the Prover. The Prover provides an answer (known as a Response) question and proves their knowledge of the Witness. The ZK protocol validates the answer provided by the Prover and relays the truthfulness of the transaction to the Verifier. Therefore, the only information the recipient of the transaction has is whether it is true or false.

Once a transaction’s integrity is proven this way they are added to the batch and sent to the main network for validation. Unlike optimistic rollups, these transactions are not subjected to further investigation, and funds can be withdrawn within 3 hours without needing to wait for a challenge period to elapse. 

Here are some examples of zk-rollups:

zkSync

zkSync is a Layer 2 network on the Ethereum blockchain that utilizes zero knowledge technology to improve the efficiency and cost-effectiveness of transactions on its network. zkSync Era, the project’s mainnet, is one of the first zero knowledge rollups and was launched on March 24, 2023. At the moment, all transactions in zkSync Era are transparent, with details available for public view, although the team has confirmed that there are plans to implement privacy to encouage improved adoption. 

While zkSync Era is currently the largest zero knowledge rollup in the space, it is EVM-compatible instead of EVM-equivalent, which results in faster prover times by making it easier to be a prover. However, it comes with the downside of more incompatibility with EVM, which means projects may need to change the code before deploying on zkSync. 

Consensys’ Linea Network

Linea is a zero knowledge L2 network developed with lattice-base cryptography. Unlike zkSync which is EVM-compatible, Linea is a type 2 ZKEVM and is designed to be fully EVM-equivalent. This means that applications previously deployed on the mainnet can be moved to the Linea network without the need to recompile the code into a new programming language bytecode before they can operate on the Linea network.

However, to stay competitive, Linea has to overcome the challenge around improving the prover time, as proofs for Ethereum blocks can take hours. 

Taiko

Taiko is an upcoming type 1 ZKEVM rollup that aims to be fully Ethereum-equivalent, where developers and users can leverage the power of Ethereum Layer 1 without needing to make any changes. Driven by the principle of “develop once, deploy everywhere”, the CEO of Taiko believes that Ethereum needed a scaling solution that was similar to the original platform. His sentiments are echoed by Vitalik Buterin, who writes “type 1 ZK-EVMs are what we ultimately need make the Ethereum layer 1 itself more scalable… (they) are also ideal for rollups, because they allow rollups to re-use a lot of infrastructure.” 

Taiko is also focusing on security and decentralization, and the protocol is planing to launch with a fully decentralized proposer and prover set, to allow anyone to perform those duties without whitelisting. 

Comparing Traits of Optimistic and Zero Knowledge Rollups

Optimistic and zero knowledge rollups have seen quite a level of adoption as cryptocurrency investors explore more cost and time-effective ways of performing routine cryptocurrency transactions, with rollups boasting over $2 billion in TVL. We have discussed how both functions and here are some differences they share;

Security and Validity Proofs (Fraud-Proofs and Zero Knowledge Validity Proofs)

Zero knowledge rollups employ smart contracts to handle the verification of transactions’ integrity through ZK validity proofs. In contrast, optimistic rollups consider transactions valid and depend on the fraud-proof system which adopts a tradition similar to the consensus systems. Validators make up the fraud-proof system and take up the role of screening out malicious transactions and alerting the system to remove the transaction from the queue.

In spite of there having been only a few challenges to date, considering every transaction as valid is already a security risk in an optimistic rollup; the fraud-proof system might be effective but doesn’t totally assure zero risk from optimistic batched transactions. While the challenge period in the fraud-proof system acts as an additional layer of security, it is still dependent on validators to flag potentially fraudulent transactions. On the other hand, the automation system in validity proofs removes the chances of operational errors in the validation of transactions before they are batched, and instant validations, as seen in ZK rollups, is a more secure approach to handling transactions, although this comes with longer proving time needed.

Transaction Finality

The challenge period in optimistic rollups is up to seven days. Therefore, these transactions are not hashed into the main network until this time. On the other hand, transactions on ZK rollups reach finality on the main network faster than optimistic rollups, as finality on the mainnet for each ZK rollup batch is instant. Due to this, the withdrawal period for both networks is different, as to bridge assets from optimistic rollup networks to the mainnet could take up to 7 days. Meanwhile, withdrawals on ZK rollups are completed as soon as the transaction batch is submitted to the mainnet and validated, usually taking a maximum of three hours.

Scalability and Cost

ZK-rollup transactions are relatively heavier due to validity-proof computations. A ZK rollup batch consumes up 500,000 gwei; this is high when compared to 40,000 gwei recorded in a normal scenario for an optimistic rollup. The lighter weight is due to the absence of complex mathematical computations in the batched transaction data. The light weight and low gas cost make optimistic rollup networks a cheaper and relatively more scalable option for users.

Privacy

The ZK validity proof is by original design, a privacy-focused verification system. It is able to prove that a transaction is valid without knowing the specific details of the transaction. This is quite different in optimistic rollups where the validators are aware of the transactions’ details and screen the data to detect inconsistencies. As a result, zero knowledge rollups are more privacy-oriented and could be a more viable option for privacy-focused applications.

Popularity

Optimistic rollups are relatively simpler technology, compared to zero knowledge rollups. Optimistic rollup networks were also some of the first general-purpose L2 scaling solutions to roll out and have enjoyed some fame due to this. The relative ease of developing general-purpose optimistic rollup networks also makes such networks more rampant, especially with the rise of the OP Stack, which makes it even easier for projects to roll out their own Layer 2. 

To date, the top three rollups by TVL are all optimistic rollups (Arbitrum, Optimism, and Base). While zkSync is in 4th place, DefiLlama reports that it only has an average of around 4% of the total rollup TVL.

The discrepancy in popularity is also thanks to significant differences in transaction costs. Currently, optimistic rollup networks offer cheaper transaction fees compared to ZK networks, which also contributes to the overall higher prevalence of optimistic rollup networks.  

EVM-compatibility

Optimism, Mantle, Arbitrum, and other similar optimistic rollup L2s are EVM-compatible, making it easy for developers to use Ethereum-native tools to develop dApps on optimistic rollups. However, not every zero knowledge rollup is EVM-compatible, requiring more work on the developer’s end to ensure that dApps work on zk rollups. 

Final Thoughts

The optimism of optimistic rollups might be regarded as a security and privacy weakness, at least relative to zero knowledge rollups. But this also gives it a strong performance score over ZK rollups, based on transaction costs and computation requirements. Both systems share unique strengths and weaknesses. But they are more of a complementary set rather than differing systems.

Thanks to interoperability protocols, crypto investors can resort to optimistic and zero knowledge rollup networks for their differing transaction needs. ZK-rollup networks for private, more secure transactions and instant withdrawals from L2 networks, and optimistic rollup networks when speed is paramount. But this is totally up to the user.

However, ZK rollups, despite being under the hood currently, compared to optimistic rollups, propagates the core values of blockchain technology. The complex technology accounts for the slower development and adoption, and as the technology continues to develop, these issues could get a viable fix. In 2023 alone, we’ve seen the number of ZK rollups catching up to the optimistic rollups, and as Vitalik opined, ZK rollups could be the endgame in the roll-up technology, where ” in the medium to long term ZK rollups will win out in all use cases as ZK-SNARK technology improves.”

This article only discusses the strengths and weaknesses of both systems based on the technology used. Note it is only for educational purposes and not financial advice. 

https://www.coingecko.com/learn/holesky-testnet-eth

How to Claim Holesky Testnet ETH (HolETH) From Faucets

Holesky ETH tokens are needed to interact with the Holesky network. You can currently claim Holesky tokens from the Holešky PoW Faucet and the Quicknode Faucet. We recommend the Holešky PoW Faucet, as you can claim a maximum of 33 HolETH, while Quicknode is limited to 5 HolETH. 

Key Takeaways

• The Holesky testnet is replacing the Goerli testnet for the Ethereum network. The new testnet will serve as a test environment for staking features, infrastructures, and protocols. The Sepolia testnet will remain the recommended testnet for EVM-related applications.

• With Holesky, Ethereum developers claim to be working towards delivering an enhanced testing environment and improved tokenomics to enable developers to run testing with more ease and accuracy.

• Holesky was successfully launched on 28 September 2023. 

The Holesky testnet will be replacing the Goerli testnet. It is planned to be the new testing environment for protocol developments, infrastructures, and developments related to consensus staking. Alongside Sepolia, Holesky will become the primary testing environment for developers on Ethereum.

The Holesky testnet was scheduled for launch on September 15, 2023, however, due to a couple of ‘mismatch errors’ as reported in this post by an Ethereum developer, the testnet launch was delayed 

In this article, we’ll take a look at how to add the Holesky testnet to MetaMask, faucets to claim Holesky testnet ETH, and we’ll finish off with a comparison of Holesky and the existing Sepolia testnet. 

Let’s get started!

Add the Holesky Testnet to MetaMask

First, you’ll need to add the Holesky testnet to your MetaMask wallet in order to connect to the network.

Add the Holesky Testnet Manually

1. From your MetaMask wallet dashboard, click the network icon from the top left corner of your wallet. Click Add Network.

2. A list of pre-set networks is shown; as Holesky is not in that list, click on Add a Network Manually.

3. On the form, enter the network details accordingly

• Network name: Holesky Testnet

• Network URL: https://ethereum-holesky.publicnode.com

• Chain ID: 17000 

• Currency symbol: ETH 

• Block explorer URL: https://holesky.beaconcha.in

In the event you encounter any errors adding the above to MetaMask, cross-check the Network URL with Chainlist based on the below steps.

4. Click Save to complete.

You can also add the network via Chainlist.

Add Holesky Testnet to Metamask Through Chainlist

1. Visit the Chainlist platform and connect your wallet.

2. Enter Holesky in the search bar at the top of the page. The Holesky testnet Chain ID is 17000. Click Add to MetaMask on the search result with the correct ID.

3. Follow the prompts in your wallet to add the network to your wallet.

You can now switch to the Holesky testnet on MetaMask.

Add Holesky Testnet to MetaMask Through Holesky Homepage

1. Visit the Holesky homepage at https://holesky.ethpandaops.io/

2. Click Add network to MetaMask.

3. Follow the prompts in your wallet to add the network to MetaMask.

Now you have the network integrated into your wallet, let’s claim some testnet tokens.

Claim Holesky Testnet ETH With Faucets

There are a few faucet options available to start claiming Holesky testnet ETH to interact with the blockchain.

Claim Holesky Testnet ETH With the Holešky PoW Faucet

1. Visit the Holešky PoW Faucet at https://holesky-faucet.pk910.de/.

2. Enter your ETH address or ENS name, complete the CAPTCHA, and click Start Mining.

3. Start mining Holesky ETH – note that there is a minimum claim of 0.5 Holsky ETH.

4. When you’re ready to claim your Holsky Testnet ETH, click Stop Mining & Claim Rewards.

5. In the next window, you can review the amount of Holsky ETH mined, and receive your testnet ETH by clicking Claim Rewards.

6. You will receive the Holsky Testnet ETH in your wallet. Switch your network to Holesky to view your testnet ETH. 

Claim Holesky Testnet ETH on the QuickNode Holesky Faucet

1. Visit the QuickNode Holesky Faucet.

2. To fill in your wallet address automatically, click Connect Wallet to connect your wallet to the platform. Alternatively, you can also copy and paste your wallet address. Click Continue to proceed

3. You can share a post about your claim to receive 4 HolETH or click No thanks, just send me 1 ETH to proceed.

4. Wait for the transaction to complete and Holesky ETH will be sent to your wallet.

What Is the Holesky Testnet?

The Holesky testnet is the successor of the Goerli testnet which is being sunset. Holesky takes over Goerli and comes with a number of enhancements, all focused on creating a better testing environment for developers on the network. Like Goerli, Holesky is a cost-free environment for testing protocols meant to be deployed on the main network. 

Tokens on the network are only used for testing; they are distributed for free through faucets like the ones mentioned above and are not meant to be sold. The idea is to give developers and users freedom in terms of resources so as to ensure that testing procedures are as thorough as possible. The Holesky testnet will serve as a staking, infrastructure, and protocol-developer testnet.

Like other testnets, the Holesky testnet mirrors the Ethereum network. It runs the proof of stake consensus algorithm. Core differences between the Ethereum network, Goerli testnet, and Holesky testnet are the validator count and tokenomics. Holesky has over 1.4 million validators. This is a significant increase, relative to about 700,000 and 500,000 validators on the Ethereum network and the Goerli testnet respectively.

Holesky testnet’s high validator count is in line with the goal of creating an environment to properly test an application to detect and fix possible scaling issues that could emerge from deploying to a main network with a higher validator count than the test network. To achieve this high count, running a validator node on the Holesky testnet will be open to the public. The current validator count for the network at launch is at about 1.46 million, which is higher than the sum of validators on the mainnet and Goerli testnet.

About 1.6 billion Holesky ETH (HolETH) will also be available on the network. The high testnet token supply is also a fix for the supply friction witnessed on the Goerli testnet. The supply friction that led to the trading of Goerli testnet ETH created a significant headache for developers and users who wish to participate in testing programs. The high supply of Holesky ETH is meant to keep the participation barrier for testing programs as low as possible and ensure that every protocol is tested properly before being deployed on the mainnet.

Utility of Holesky Testnet ETH

Holesky ETH can be used to test protocols deployed on the network, and also offers newer users a way to familiarize themselves with blockchain operations.

Test Protocols

At time of writing, the Holesky testnet is specific for specialized purposes. The network is unlikely to receive significant deployment of dApps that are meant to interact with the EVM. However, this is not certain at the time of writing. With that in mind, the best use case for your test tokens is likely to be for protocol testing programs.

As a developer deploying a new protocol to the Ethereum network, the Holesky testnet offers a facility to test the protocol’s functionalities without risk. You can leverage the new environment and Holesky ETH to thoroughly test your protocols before deploying to the main network. As a regular network user, you can also contribute to the testing program using your Holesky ETH.

Use the Blockchain

 While the primary use cases for the Holesky testnet are for testing protocols, you can also leverage the network and the testnet tokens to experiment with basic and advanced blockchain operations, especially if you’re new to crypto. Feel free to claim some free tokens and test as many procedures as possible before performing similar operations on the main network.

Holesky Testnet vs. Sepolia Testnet

With the launch of Holesky, it will become one of the main testing environments for Ethereum along with the Sepolia testnet. Sepolia has previously served as one of the three test environments for the Shanghai upgrade. Both testnets mirror the Ethereum network with the Sepolia testnet switching to POS alongside the main network. Holesky will run the POS algorithm from the onset. A few differences exist between the two testnets, some of them including;

Final Thoughts

The decision to introduce a new testnet for the Ethereum network every two years is quite an exciting one. While these changes might not appeal to some users and developers, it is a chance for the Ethereum team to introduce new testing environments, built from scratch. Building from scratch instead of upgrading older testnets makes it easier for developers to reflect new technologies and fixes for older testnets. An instance is the tokenomics issue on Goerli which the Holesky testnet fixes with the new supply scheme. The validator count will also be a positive development for developers on the network. 

In this article, we have shared a guide on how to get started with the new network, from adding Holesky to your MetaMask to claiming Holesky testnet tokens from faucets. Finally, note that this article is only for educational purposes and not financial advice. 

https://www.coingecko.com/learn/what-is-ton-toncoin-crypto

What Is TON and Toncoin?

TON (The Open Network) is a blockchain designed for scalable cross-chain interoperability, originally developed by Telegram, but is currently developed by the TON Foundation. Toncoin is the native token of TON and can be used for network operations and other transactions for applications built on TON.

Telegram also recently announced the integration of a self-custody TON-based wallet (TON Space) into its messaging application.

Key Takeaways

• TON is short for The Open Network. TON is developed by the TON Foundation with recorded affiliation to the popular messaging application – Telegram. 

• According to its design, TON takes a divisional approach to blockchain scalability. It rations the network’s workload across different subchains that work in synergy with a master chain. It claims that this strategy keeps the network light and efficient.

• Toncoin is the native token of the project and is used for governance and other network operations for apps built on TON.

On September 13, 2023, Telegram announced the integration of a self-custody TON-based crypto wallet. The wallet – TON Space – will be directly integrated into the messaging application to allow users to access financial services built on top of the TON network. With over 800 million people using the popular messaging application, Telegram hopes to scale the adoption of decentralized financial solutions while boosting the usage of its affiliated blockchain network –TON.

“Telegram’s mission has always been to enable freedom of speech, but speech is so much more in this digital age. We believe users have the right to own their identities and assets. With TON Space, users now have the technology to make that convenient. With this announcement, we are putting digital ownership rights in the hands of our entire user base. While also giving TON projects the tools to reach our audience in the largest Web3/Web2 integration there has ever been.”

– John Hyman, Telegram’s Chief Investment Officer

Prior to the rebrand to The Open Network, TON’s development had started earlier, as the Telegram Open network, launching its testnet in 2019. However, due to regulatory friction, the development came to a halt and resumed later on as The Open Network (TON); it retains this name at the time of writing.

Built to handle financial operations from an excess of 800 million users, TON is poised to entertain a significant usage, but what is TON and how does it work?

Introduction to TON

The Open Network (TON) is a decentralized Layer 1 smart contract network built for routine and specialized financial applications. It supports the creation of fungible and non-fungible tokens; over a million NFTs have been minted on the network. 

TON is a Proof of Stake (PoS) network with a focus on delivering a scalable network for financial activities and a medium for diverse users to interact over an immutable financial infrastructure. By adopting the PoS consensus algorithm and an overall flexible design, The Open Network hopes to develop a blockchain network that can be used by billions of users without breaking down or losing significant efficiency. The switch from Proof of Work (PoW) to Proof of Stake consensus is in line with this goal and also an attempt to adopt a more environmentally friendly consensus system.

TON runs a virtual machine that manages the state of the network and allows external applications and contract accounts to communicate with the network. Decentralized finance projects are able to deploy their solutions on the network. Official sources report over 3 million accounts created on the network at the time of writing (a 143% growth from the previous year) and over 700,000 active accounts. TON has seen some significant usage; this could be influenced by its affiliation with Telegram.

TON and Telegram

The idea behind TON is to create a connection between the everyday internet user, blockchain technology, and cryptocurrency. This intention was clearly stated in the whitepaper published initially in January 2018 by Telegram co-founder Nikolai Durov. Nikolai Durov, along with his brother Pavel Durov, had created a successful messaging application and planned to leverage the application’s success to introduce the masses to cryptocurrency. 

The whitepaper detailed the structure of the blockchain network known then as Telegram Open Network with a native coin known as GRAM. The GRAM coin would embody the infrastructure being developed on TON and become a borderless medium for routine P2P transactions. Nikolai Durov undertook the development process while Pavel Durov became the face of the project.

Telegram Open Network was a PoW Layer 1 network capable of executing smart contracts. The whitepaper also shed light on the TVM, a virtual machine similar to the EVM developed on the Ethereum network. This will allow developers to deploy smart contracts and automate financial activities on the network. The testnet for TON launched in early 2019 with the mainnet scheduled for launch later the same year. However, the private sale, subsequent funding programs for the GRAM token and other operations of the Telegram Open Network team caught the attention of regulators and were subject to regulatory friction between the team and SEC. The GRAM token brand name was also used in numerous scams, fake token launches and deceptive airdrop programs.

The TON team had taken in over $1 billion in multiple funding programs, offering GRAM tokens at different prices in each sale. After deliberations with the SEC, the TON development and the scheduled launch were halted and the project repaid investors’ funds received through the funding program. Telegram also distanced itself from the project. 

TON was later relaunched as The Open Network (TON) using the source code for the Telegram Open Network. Subsequent developments were pioneered by the TON Foundation, the native token was renamed to Toncoin and the consensus algorithm changed to POS. TON remains in development under this arrangement at the time of writing.

Now how does The Open Network work?

How Does TON Work?

A blockchain network created for the purpose that is defined for TON must be flexible, fast, and cost-effective. TON’s ability to appeal to millions of users depends on how easily they can use it and how much cost it saves them, compared to traditional financial facilities. Messaging applications are meant to be light as well, therefore, applications integrated into them should be able to work without significantly increasing the total demand on the device they operate on. TON developers also identified these factors and structured the network to achieve these.

First a relatively lightweight consensus algorithm, a scalability work through – sharding – and a virtual machine (TVM).

Proof of Stake Consensus

Consensus is how nodes on a network reach agreement on the current and valid state of the network. For a network to stay in unity, every (or a majority) of the nodes on the network must agree on a uniform state after each run. Initially, TON adopted the Proof of Work consensus algorithm, which is similar to that used by Bitcoin and earlier blockchain networks. 

PoW’s approach to network consensus requires significant resources from the devices connected to the network and is a heavyweight consensus system. In addition, it requires significant electrical power. By ditching the PoW algorithm and adopting the PoS consensus, TON hopes to avoid these issues. TON runs the BPoS (Block-Proof of stake) consensus algorithm, a Byzantine Fault-Tolerant variant of the PoS algorithm.

The nodes in a PoS consensus network are run by validators and not miners as seen on the PoW network. Instead of running complex mathematical procedures, validators in a PoS network are required to lock up their assets to the network as a form of commitment to their roles. Validators are selected to screen and approve new blocks before they are hashed into the blockchain. A validator’s chances of getting selected for this role depend on the number of tokens locked in their nodes. The more tokens locked in a validator’s node, the higher their chances of getting selected. The security and decentralization of a PoS network are relative to the validator count and the number of tokens locked on the network. An attacker must control at least 51% of the assets locked on the network to be able to influence the network (known as a 51% attack).

At the time of writing, there are over 340 validators on TON, these validators are located in 24 countries. Over 488,000,000 native tokens are locked on the network. As a reward for their role, validators receive Toncoin for every block they validate. Other holders can also contribute to the network’s security and benefit from the supply swell by staking their tokens to validator nodes. TON’s BPoS ensures that the network continues to run even when about 1/3 of the validators are not available to participate in the consensus.

Sharding

Sharding is a novel approach to blockchain scalability. Networks like Zilliqa and Near Blockchain have adopted the sharding technology, Ethereum developers also plan to implement a similar technology as part of the Ethereum 2.0 upgrade.

Put simply, sharding splits a blockchain network into autonomous, yet interconnected pieces. Each piece is known as a shard and is capable of executing regular commands on its own. On TON, work-chains are split into multiple shards. Each shard is tasked with different roles and they maintain a global state. The global state removes the need for the network nodes to process every transaction, making for even more efficient transaction processing.

The TON Virtual Machine (TVM)

A virtual machine is a software version of the regular computer processing unit (CPU). The CPU receives and executes commands from applications on the device. For virtual machines on decentralized networks, these applications are contract accounts and user account. 

On TON, the TVM plays a similar role to the EVM on Ethereum and EVM networks. The TVM computes commands from contract applications on the network and changes the state of the network after each execution. Like a vending machine, it controls variables on the network. Using the TVM developers are able to create applications that automate processes like asset transfers, minting of assets, and signing messages on the network.

Here’s how TON puts these together to function;

The Open Network is a blockchain of blockchains; it consists of two major chains, the masterchain, and workchains. The masterchain is the coordinator of the network, it manages validator nodes, assets staked to the network, and the synchronization of different components within the network. 

Meanwhile, the workchains handle requests from smart contracts and decentralized applications. workchains are divided into multiple shardchains. Each shardchain processes transactions in parallel, contributing to overall efficiency. Thanks to workload splitting, sharding, and parallel transaction execution, TON claims that it is able to support millions of users and process an impressive amount of transactions per second, charging cheap fees for each transaction. 

The TVM receives requests from the shardchains and processes the state changes while network validators reach consensus on the current state through the BPOS consensus mechanism. This process is coordinated by the masterchain. TON claims that the network creates and maintains an effective communication path between the masterchain and workchains. This communication path creates a medium for the exchange of resources between decentralized applications on the network.

What Is Toncoin?

Toncoin (TON) is the native and utility token of TON. It is used to pay fees for transactions performed on the network. TON embodies the technology of The Open Network. It also furnishes the consensus system and the TON ecosystem as a whole. Validators and stakers on their nodes, stake TON to protect the network. As a reward for this role, they receive a distribution of TON for validated blocks. In addition, TON is used in the governance of the TON blockchain.

The recent developments has also brought TON to a new six-month high.

Governance

The on-chain governance platform for TON is designed and managed by Orbs Network. The functionality of this facility is proposed in a lite paper delivered by Shahar Yakir and Ami Hazbany. Ton.vote is designed for proposals concerned with TON itself and applications in its ecosystem. The TON Foundation is one of the users of this platform. 

On the platform, community members can submit improvement proposals for the network or concerned applications. A proposal can be about financial management or technological improvements. DAO members are holders of TON or any other token indicated for the voting event. Each holder is entitled to votes relative to the number of TON (or any other selected token) in their custody.

Orbs Network claims that this voting platform makes for transparency and anyone can audit the consensus process. The platform also allows the proposer to select multiple tokens for the voting procedure and define the most significant aspects of the voting process, including the duration of the voting process. A notable decision from the TON DAO includes the proposal to freeze over $2.5 billion worth of inactive Toncoin in the first quarter of 2023.

Tokenomics

Toncoin is the utility token of the network, apart from being used for transaction fees, validator, and stakers’ reward, and voting on proposals organized by the TON Foundation, it is also used for paying for facilities on the network like the TON proxy and TON DNS. Decentralized applications on the network are also integrating TON as their base currency.

The total supply of the Toncoin isn’t clear at the time of writing, however, information on CoinGecko places the circulating supply at over 3.4 billion, out of a total supply of just under 5.1 billion as of September 2023. The number of TON in supply is expected to increase over time as validators receive rewards. TON is tradable on centralized exchanges like Kucoin, and Huobi and decentralized exchanges like Uniswap. See active trading pairs for TON

Other Web3 Services on TON

In addition to offering decentralized financial services for messaging applications and providing a decentralized network where applications can be built, the TON network also offers some other facilities and services for developers and the everyday blockchain and internet user. Here are some of these services.

TON Storage

The blockchain is a store of data; the differences between it and traditional storage facilities are decentralization and relative flexibility. Several blockchain projects like Storj and FileCoin are focused on harnessing the potential of the blockchain as a means of storing data. TON also taps this potential for the TON Storage. 

With the TON Storage, TON hopes to create a data approach system that can be accessed from anywhere in the world, at the same speed. TON Storage is based on torrents, a peer-to-peer file-sharing technology. TON claims that users can upload data and multimedia to the network and identify them with unique codes; these files can be retrieved by anyone using the file ID. Files stored on the network can be integrated with other TON components and contracts on the network, including TON NFTs.

TON DNS

TON Domain Name Service (DNS) lets you turn the long alphanumeric TON wallet addresses to human readable names like yourname.ton or any other names a user wishes to convert their wallets addresses to. Anyone can send funds to your TON DNS name. TON DNS converts the wallet names to smart contract addresses and addresses that can be used with other components like TON sites. The domains are implemented as NFTs and can be used as regular NFTs. TON domain owners can also create subdomains.

TON Proxy and Sites

The TON network holds data like a database and executes commands like a regular computer. It is both a data bank and a proper network, therefore developers building applications that interact with the network will need to perform CRUD (create, read, update, and delete) requests to the network. 

TON Proxy creates a connection between these developers, their applications, and the TON blockchain. Applications that might need to interact with the network in this way include centralized exchanges and DeFi applications. Through TON Proxy, interested developers can obtain data from the network. Ton claims that TON Proxy is being optimized over different releases to ensure user privacy and also secure the network and the connections.

With the TON Sites, users can launch web servers with their websites and make them available on the TON network. That is you can host your website on TON. TON Sites use the TON DNS. TON claims to provide automatic security and privacy for TON sites through encryption and authenticity verification.

Final Thoughts

Compared to similar projects, TON started on a high note. The Telegram application has grown into one of the most used messaging applications, TON’s affiliation with a social application of this relevance is a huge boost in its goal of pushing the adoption of decentralized financial solutions. However, the chances of achieving this goal are dependent on the technology being built around The Open Network. 

As the network continues to grow in user base, it will become clearer how efficient this approach really is. Wallet applications like @wallet that connect Telegram users to the TON network are already in use and users are exploring the idea of having a defined payment facility integrated into their routing messaging application. Having said this, it is important to fully understand how these applications work, and the provisions for custody and security. Also, note that this article is only for educational purposes and not financial advice.

https://www.coingecko.com/learn/add-solana-to-metamask

Adding Solana to MetaMask

While you cannot add the Solana network to your MetaMask wallet, you can use your MetaMask wallet to connect to Solana dApps through the Solana Wallet Snap. 

Key Takeaways

• Thanks to MetaMask Snaps you can now connect to non-EVM networks through your MetaMask wallets.

• Solana is one of the networks for which a wallet Snap has already been developed. Investors on the network can now manage their assets without downloading a special Solana wallet.

• In this article, we go through the installation procedure and the basic operations for the Solana Wallet Snap.

Solana blockchain has earned quite a reputation in the crypto space, the smart contract and Web3 blockchain houses hundreds of decentralized applications and smart contracts. DefiLlama reports over $310 million worth of crypto assets locked in Solana DeFi protocols. Artemis reports an average of 200,000 active users and over 13 million transactions executed on the network daily. 

Solana’s acclaimed speed and cost-effectiveness have earned it quite a significant user base but unlike other similar networks like BNB Smart chain (BSC), Fantom Opera Chain, and Polygon POS chain, Solana is not an EVM network and can only be directly accessed via Solana-specific wallets like Phantom. Well, this could be in the past…

Can You Add Solana to MetaMask?

MetaMask is arguably the most used cryptocurrency wallet. A reported excess of 10 million cryptocurrency investors hold their assets in the cryptocurrency wallet. However, MetaMask only supports EVM networks. It has maintained this pattern since it launched the first-ever version. Users on new and existing EVM networks can easily plug into their network by setting them up on MetaMask. 

In an attempt to move away from the focus on EVM networks and open up its infrastructure to other networks including Bitcoin and Solana, Consensys has introduced MetaMask Snaps. By developing a Solana Wallet Snap, Solflare offers potential Solana investors and MetaMask users a way to connect to the Solana network without needing a specific Solana wallet.

However, it is important to note that this arrangement is considerably different from the usual EVM network integration on MetaMask. Instead of adding an EVM network through RPC details, Solana wallet Snap users connect to supported Web3 applications by selecting MetaMask as their wallet.

What Are MetaMask Snaps?

MetaMask Snaps lets developers create external applications that can operate on the MetaMask infrastructure. Snaps are permissioned third-party Javascript applications that can be installed on the MetaMask wallet to allow users to add extra functionalities to the regular operations on the wallet. 

Interoperability snaps hope to open MetaMask to the wider blockchain space, while other MetaMask Snaps categories include transaction insights to improve security, and notifications to keep you updated. 

However, while a Snap can connect you to a non-EVM network, you cannot manage your assets directly from the MetaMask interface. Instead, you might need to connect to a different interface to manage your Solana wallet.

Now, let’s go through the process of installing and using the Solana Wallet snap.

How to Install Solana Wallet Snap Through MetaMask Snaps

To use the Solana Wallet Snap, we will need to install it first. The MetaMask Snap Directory is the recommended source of MetaMask Snaps. MetaMask claims that Snaps in the directory have passed third-party audits before being listed. While you can also install Snap from the Snaps developer’s platform, it is important to consider security and verify authenticity in either case.

For this tutorial, we will use the Solana wallet by Solflare. Note that this is not a recommendation and you can also use any other available Solana Wallet Snaps. The installation process and other basic operations are generally similar.

Installing and Setting Up

1. Visit the MetaMask Snap directory and search for Solana wallet in the search bar.

2. Select the Solana Wallet by Solflare, then click Add to MetaMask from the right corner to start the installation.

3. An installation dialog opens up. Click Connect from the dialog. Follow the subsequent prompts and accept permission requests.

4. Understand the application permissions and accept them if you are comfortable with the requested permissions.

5. The Solana Wallet is now installed on MetaMask. To use the wallet, you will need to run a set-up as well from the wallet provider’s platform.

Setting Up Wallet on Solflare

1. Visit the Solflare Solana Snap platform and click Get Started to begin the onboarding process.

2. Click Enter Solana to continue. Allow the procedure to complete.

3. Once completed, your Solflare Solana Wallet will be ready for use, and you can bridge your assets to Soflare. 

Note that you will always need to return to this interface to manage your Solflare portfolio. 

How to Use the Solana Wallet Snap

The Solana Wallet snap is an almost complete Solana and Web3 wallet. It provides you with a personal wallet and other extra facilities including a bridge and asset swap. Here are some things you can do with your Solana Wallet Snap.

Managing Your Solana Portfolio with Solflare

On your Solflare interface, you can receive and send crypto assets.  To receive an asset, you can copy your indicated address or click Receive from the right corner to see the address or scan the barcode.

To send assets from your wallet, click Send from the right corner.

Enter the amount you wish to send and the receiving address. Click Send to continue

Click on Confirm and Approve the transaction from your MetaMask wallet.

How to Swap and Stake With Solflare

1. Navigate to the Swap section and enter the asset you wish to swap.

2. Click Swap and confirm the transaction from your MetaMask wallet.

You can also stake your assets from your Solflare wallet interface.

1. Navigate to the Staking interface and click Stake Now to continue.

2. On the staking page, enter the amount you wish to stake and select a staking operator. 

Solflare is the only available staking operator at the time of writing. When more operators become available, you can select an operator you wish to stake to.

3. Click Stake to continue.

4. Confirm and approve the transaction from your MetaMask wallet to complete.

Bridging Your Assets Using the Solana Wallet Snap

The Solflare also allows you to bridge assets to other networks through your wallet. You can bridge to Ethereum, BSC, Polygon, and Arbitrum from your Solflare interface.

1. Navigate to the bridge section 

2. Set the bridging direction and select the assets you wish to bridge, then enter the amount you want to bridge and click Review.

Note that your MetaMask wallet is automatically selected as the recipient account. 

3. Confirm and approve from your MetaMask wallet. 

Connecting to a dApp via Solana Wallet Snap

You can connect to any Solana dApp that supports the MetaMask Snap. This is likely available for every platform that supports the Solflare web wallet. Marinade Finance, the top protocol on Solana by TVL, is one of these platforms. Let’s connect to Marinade Finance through the MetaMask Snap.

1. Visit the Marinade Finance dApp and click Connect Wallet.

2. Select MetaMask. You will see a small Solana icon next to the MetaMask fox.  

3. A popup window will appear – click Continue to establish a connection between the Snap and the app.

4. This then opens another popup window. You will need to keep this window open throughout your connection to the dApp.

5. Connect your Solana Wallet to the dApp.

6. You can now stake SOL on Marinade Finance from your Solana Wallet Snap. You can also use the Solflare interface, a widget embedded in connected Solana apps to manage your portfolio.

FAQs Around the Solana Wallet Snap

Here are a few things you might need to know:

Custodianship

The Solflare wallet is managed from the related MetaMask wallet. Solflare doesn’t provide users with new private keys when they create the Solana Snap wallet. The wallet is attached to your Solana Wallet Snap, and wallet details are unique to your Solana Wallet Snap.

What Happens When You Delete and Re-Install Your Solana Snap?

Deleting or disabling your Solana wallet Snap stops it from interacting with your MetaMask wallet. However, when you re-install your Solana wallet Snap to your MetaMask wallet, your old portfolio is retained.

Can You Manage Your Solana Assets Within MetaMask?

No, you cannot manage your Solana assets directly through MetaMask, but you can either use the Solflare interface, a widget within connected Solana apps as seen above, or you can connect your MetaMask to Solflare.com, where you can view and manage your assets.

Final Thoughts

MetaMask has built a large user base and the new Snaps feature is opening it up to more use cases and more communities. MetaMask users who crave to manage their crypto assets from just one wallet provider can now leverage snaps to run operations on other networks they are invested in. The Solana Wallet Snap is just one of the many facilities that have been created using the new snap technology. We have gone through the basic operations in the course of this tutorial; however, this guide is not exhaustive of everything you could do with the Solana wallet snap on MetaMask.

As the feature continues to mature, more use cases for non-EVM networks connecting to MetaMask through snaps could emerge. Ensure to understand how these affect your wallet and apply risk management strategies when due. Also, note that this article is only for educational purposes and not financial advice. Featured applications are not a recommendation or a form of endorsement.

https://www.coingecko.com/learn/bridge-to-avalanche-avax

Bridging Assets to Avalanche

To bridge assets to Avalanche, you can use the Core application, which is the official bridge by Ava Labs. Alternatively, you can opt for third-party bridges like Stargate Finance, where key considerations are liquidity available and the range of tokens available. For convenience, you may choose to use MetaMask, where you can bridge assets from the comfort of your MetaMask wallet, although that includes a small additional fee.

Key Takeaways

• Avalanche is an EVM-compatible blockchain network. It runs on the POS consensus algorithm and features the subnet technology.

• Using bridges, asset owners can move their crypto assets between the network and other blockchain networks including non-EVM networks like Solana.

• When choosing a bridge, key considerations are liquidity, fees, and tokens supported, although it is also important to do your own research on the bridge’s security before committing your funds.

• The Avalanche project runs an official bridge, although you can also use other bridging facilities like Stargate Finance, Synapse, and Jumper.

Avalanche network has seen a spike in usage statistics, with data from Artemis showing a four-month high in daily transactions. TVL on the network has also grown by over $10 million between September and October. A significant portion of this growth is being attributed to the launch of Stars Arena, a decentralized social finance application on the Avalanche blockchain. 

Avalanche is an EVM-compatible blockchain with a focus on improving transaction speed and economics, relative to Ethereum. It pursues scalability and efficiency through Subnets, which are sovereign networks that define its own membership and tokenomics rules. A Subnet can validate multiple blockchains, but a blockchain can only be validated by one Subnet. 

If you’re looking to move your crypto assets to the Avalanche network, you’ll likely need to use either decentralized bridges or swap tokens using a centralized exchange. 

What Bridge Should I Use to Bridge to Avalanche?

Having reviewed the different Available bridges for moving your asset to the Avalanche network, I’d recommend the bridge facility provided by Core on the basis of affiliation with the Avalanche team. Core also offers rebates in the form of AVAX airdrops for bridge transactions worth above $75 in any asset. 

However, if you’re looking to bridge a wider range of assets, you can also consider Stargate Finance, which is one of the largest bridges by TVL and offers cross-chain asset swaps. It is particularly useful for users who are looking to swap or bridge a large volume of assets, due to its liquidity depth. Also, unlike traditional bridges which utilize siloed pools for distinct tokens where each chain needs to maintain its own liquidity pool, Stargate uses unified liquidity pools and rebalancing fees to ensure that pools are always filled. That said, you can also check on the fees across different bridging options before deciding which bridge to use. 

Now, let’s dive into the different decentralized bridges and how you can bridge assets to Avalanche. 

Official AVAX Bridge

The Core application is released by Ava Labs, the same company that created the Avalanche blockchain. Core is a multi-purpose application with extensive support for the Avalanche network. Core features utilities such as a custodial wallet for holding AVAX and other Avalanche tokens, as well as an interface for other operations including validators staking and delegating to validators on the Avalanche network. 

It also features a selection of tools and decentralized applications on the Avalanche network. Using the Core application, which is available on mobile and browser extensions, you can swap your token and also bridge between Avalanche and other networks, including Ethereum and Bitcoin networks.

Here’s how you can use the Core application to bridge to the Avalanche network.

You can download the Core extension on your device and set up an Avalanche wallet, although the platform works just fine with your MetaMask or any other supported wallets. You can also download the mobile application from your device’s application store.

1. Visit the Core app and click Connect Wallet and select your wallet provider.

2. Navigate to the Portfolio section.

3. Click Bridge from the options on the right corner of your screen

4. Set the network you wish to bridge to Avalanche from.

If you are using MetaMask, you will need to switch to the Ethereum network if you are bridging for Ethereum to Avalanche. Follow the prompt from your wallet to switch networks.

If you’re looking to bridge from the Bitcoin network to Avalanche, it is only available on the Core extension.

5. Now you have set up your bridging destination, select the asset you wish to bridge.

6. Enter the amount, and click Bridge Tokens to continue.

Once this is completed the bridged USDC will arrive in your wallet when the transaction is confirmed on both networks.

Apart from the Core app bridge, you can also use these bridges to move your crypto assets to the Avalanche network.

Stargate Finance

Stargate Finance is a bridging platform developed using LayerZero’s interoperability technology, enabling asset owners to move crypto assets across chains in their original form with assured finality. By design, Stargate uses a unified pool system to serve transfer requests across supported chains. Liquidity providers stake their assets on Stargate’s single-asset pool and receive staking rewards in stablecoins, which are generated from fees paid by users bridging assets on the platform.

Stargate is the biggest cross-chain bridge by TVL and the bridge currently supports about 8 networks including Layer 2 scaling solutions like Arbitrum and Optimism. The omnichain technology provides a layer for supported tokens to seamlessly run and move across other chains. Stargate Finance also offers cross-chain swaps as well. Users can send an asset from the source network and receive and receive another asset on the target chain.

Here’s how you can bridge to the Avalanche network with Stargate Finance.

1. Visit Stargate Finance. Click Connect Wallet to connect your wallet to the protocol.

2. Click Transfer from the top menu to navigate to the bridge.

3. Set the direction of your transfer. Choose the source chain and destination chain, as well as the assets you are looking to bridge.

Note that transfer support for some assets is not available on the Avalanche network. You can also opt to receive a different asset on the destination network where supported.

4. Once you are done setting up the network and asset, enter the amount of the selected asset you wish to bridge.

6. Review the transaction details and click Transfer to complete.

Synapse Protocol

Synapse Protocol operates via the Synapse Interchain Network (SIN). SIN is an optimistic Proof-of-Stake network developed based on the optimistic Layer 2 scaling solution for the Ethereum network. 

Synapse claims to offer a modularly secure, trustless, and permissionless medium for transferring crypto assets between different blockchain networks. It claims that the modular security system creates an avenue for a flexible security system tailored to each blockchain network. Synapse Protocol claims that its bridge was developed by using this technology to create unified liquidity pools and a connectivity system for different blockchains.

The Synapse Protocol bridge supports over 19 blockchain networks including Avalanche, Ethereum, and Layer 2 networks. it claims that over $42 billion worth of crypto assets have been moved across these networks via its bridge.

Here’s how to bridge to the Avalanche network using the Synapse Protocol bridge.

1. Visit the Synapse Protocol platform and click Connect Wallet to connect your wallet to the protocol.

2. Click Enter Bridge to navigate to the bridge interface.

3. Set up the direction of your bridge by selecting the source network and the destination chain. Click on Switch Network from the top right corner to switch to the source network if needed.

4. Select the asset you wish to bridge and enter an amount.

5. Click Approve [Asset] to enable the protocol to use the asset.

6. Complete the bridging to receive the bridged asset on your Avalanche wallet.

Jumper Exchange

Jumper defines itself as a multi-chain liquidity aggregator with support for about 19 different blockchain networks, 33 decentralized exchanges, and 14 bridges according to information from the official website. 

Jumper claims to tap into supported bridges and package access to these bridges into a single-point API that can be utilized by projects to develop a one-stop bridge on their platform. This is powered by LI.FI, which is able to create a uniform liquidity system for cross-chains through a data mesh of cross-chain liquidity sources, including DEXs, bridges, and lending protocols.

One advantage of using Jumper is that it provides a one-stop solution to bridge and swap tokens at once, where Jumper Exchange maps out the route needed to swap from ETH to AVAX.

Now, let’s look at how to bridge to Avalanche with Jumper Exchange.

1. Visit Jumper.exchange and click Connect Wallet from the top right corner of your screen.

2. Select your wallet provider and follow the prompts to connect your wallet to the platform.

3. Click From to set the network you are bridging from and the crypto asset you wish to bridge.

4. For the destination chain, you can choose to receive an asset different from the one you are bridging from the source network. Click on the To section to set this up.

5. Click Exchange to continue.

6. Click Review Bridge to get the transaction details.

7. Select your preferred bridge options.

8. Click Start Bridging to complete the operation.

Bridge to Avalanche With MetaMask

The MetaMask bridge is also a solid choice for its affiliation with the MetaMask wallet and the ease of use, as you never have to leave the MetaMask platform, although it comes with a small additional fee and options are limited.

You can bridge between networks using the MetaMask bridge feature. The MetaMask bridge executes asset transfers between networks by connecting to other bridges like an exchange or bridge aggregator. The MetaMask bridge supports six networks at the time of writing: Ethereum, Avalanche, BSC, and Polygon networks and Layer 2 networks Optimism and Arbitrum. Supported assets include Ethereum, DAI, USDT, and USDC.

Here’s how to bridge to the Avalanche network using the MetaMask bridge.

1. Click Bridge from your MetaMask wallet dashboard.

2. On the platform, set up the direction you wish to bridge your asset. Select the Source chain in the From this network section and the destination chain in the To this network section. 

3. Select the asset you wish to bridge and set the amount as well. You can set a different route for your bridge. Click Choose a different quote from the right corner to see available options.

4. Approve the selected token for use.

Do note that using MetaMask incurs a 0.875% MetaMask fee.

Using Centralized Exchanges to Swap Assets

If you are looking to swap assets across chains, you can also consider centralized exchanges. Some centralized exchanges like Binance, Coinbase, Kucoin, etc. support withdrawals across multiple networks. You can utilize this feature to deposit from one network and withdraw from another.

Alternatively, you can also purchase the asset directly from the exchange and deposit to a destination network. Centralized exchanges serve in situations where the bridging fees are high for the asset or where it fits users’ convenience.

Final Thoughts

The Avalanche blockchain offers a competitive transaction economy and experience. The relatively cheaper transaction fees and faster transaction speed could be leveraged by cryptocurrency investors. Bridges make this possible and open up pathways for even more interactions between the network and other external networks. In the course of this article, we have explored available bridging facilities for asset transfers between Avalanche and other EVM and non-EVM networks. 

This guide covers the basic operations on these platforms and is not exhaustive of the operations that can be carried out on these platforms. regardless of the direction you wish to bridge your assets, the procedures are similar. However, for operations that go beyond the scope of the article, ensure that you understand the procedures and what they entail. If you’re using MetaMask as your wallet to connect to these networks, you can use MetaMask’s transaction insights Snaps to see the likely outcome of your transaction. 

Also, note that this article is only for educational purposes and not financial advice. Featured bridges only serve to guide users through the basic process and not as a form of recommendation. ‘Recommended’ bridges are only on the basis of favorable bridging conditions like security of assets, charges, and efficiency. Bridges have their own security risk and risk-management strategies are advised.

https://www.coingecko.com/learn/what-is-frax-crypto

What Is Frax Finance?

Frax Finance is a DeFi protocol that includes a multi-chain stablecoin protocol (FRAX), liquid staking on Ethereum (frxETH), lending markets, and liquidity systems like DEXs. The protocol uses vetokenomics and Frax Shares (FXS) for governance, where users can lock up FXS in exchange for veFXS, which are used for governance votes.

Key Takeaways

• Frax Finance’s first product was FRAX, a USD-pegged stablecoin. Since its inception, it has evolved from a fractional algorithmic stablecoin to a 100% collateralized model that does not rely on external fiat reserves or other stablecoins, instead using AMO smart contracts and certain real-world assets held by partner entities. 

• Along with stablecoins, Frax Finance is also focused on building out its own DeFi ecosystem across verticals like liquidity systems and lending markets, such as FraxSwap and Fraxlend. It also has its own liquid staking system, Frax Ether, that comprises of frxETH and sfrxETH.

• Frax Shares (FXS) can be locked up in exchange for veFXS, which are used for governance votes. 

• In this article, we take a look at how the assets and algorithms that make up the protocol work together as designed by Frax Finance.

Frax Finance started out as only a fractional-algorithmic stablecoin protocol, but has since evolved to become a full-fledged DeFi ecosystem across multiple verticals. Sam Kazemian, a co-founder of Frax Finance believes that DeFi’s core services can be broken down into three categories: stablecoins, liquidity systems like DEXs, and lending markets, and Frax Finance has started offering all three categories under its umbrella on Ethereum. 

What Is the Frax (FRAX) Stablecoin?

FRAX is a stablecoin pegged to the value of the US dollar. As the name suggests, stablecoins are designed to maintain a close peg to its related asset, such as the USD. In crypto, stablecoins provide a way for traders to store their profits in between trades by providing a stable value without requiring users to off-ramp. 

CoinGecko reports over $123 billion in total market capitalization of stablecoins. These projects share similarities in how they develop and maintain a stable value. Either through collateralization (or over-collateralization) or through algorithms that are intended to keep the value regulated in dynamism. The latter are known as algorithmic stablecoins while the former are referred to as asset-backed stablecoins.

However, both systems have their shortcomings such as the centralization risk around asset-backed stablecoins like USDT and USDC, while algorithmic stablecoins have an increased risk around depegs, as seen in the UST depeg. This brings us to FRAX v1, a fractional algorithmic stablecoin. 

FRAX V1

In the first version of FRAX, the protocol defines a generation and distribution technique that aims to keep the value of the Frax stablecoin at around 1 USD. This technique involves a partly collateralized and partly algorithmic self-functioning and decentralized system that shifts the whole system in response to slight variations in the value of FRAX. This system involves two assets, USDC and the Frax Share (FXS).

Two assets make up the pool; USDC and FXS. To mint FRAX, a user locks up USDC and FXS at a ratio defined by the system, this ratio is known as the collateralization ratio (CR). For instance, if the collateralization ratio is 60%, a user who wishes to mint $1 worth of FRAX will commit $0.60 USDC and $0.40 worth of FXS. This $0.40 of Frax Shares will be burnt.

There are three main states for the FRAX stablecoin:

• Decollateralize: Lower the CR when FRAX > $1

• Equilibrium: No change in CR when FRAX = $1 

• Recollateralize: Increase the CR when FRAX <$1

FRAX V2

FRAX v2 introduces AMOs (Algorithmic Market Operations Controller), an autonomous contract that enacts arbitrary monetary policies that do not change the price of FRAX off its peg (like minting FRAX out of thin air) to the v1 stablecoin.

Generally, AMOs work by placing idle collateral in yield generating protocols (Aave, Yearn, Compound) or liquidity pools (Curve, Uniswap v3) in the decollateralization state, and withdrawing assets based on needs when recollateralization is required. In the meantime, the protocol accrues transaction fees, interest, and other rewards. This revenue can be used for FXS buybacks that are distributed to veFXS stakers. 

FRAX V3

The V3 is the latest version of the FRAX stablecoin, and it plans to peg FRAX directly to the USD also move away from reliance on USDC (and potential third-party vulnerabilities) as seen in its earlier models. 

V3 deployment is ongoing at the time of writing and is expected to be completed in a few weeks, according to information from the project team. With the upgrade to V3, the FRAX finance team plans to achieve a 100% collateralization ratio for the FRAX stablecoin using AMOs and real-world assets (RWA).  FRAX V3 will leverage oracles, and other protocols in the FRAX ecosystem like Fraxlend and Fraxswap to create a ‘sovereign USD peg’ for the FRAX stablecoin.

AMOs in V3 are deployed on Fraxlend, external protocols like Curve Finance, and FRAX RWA partners. The Frax governance makes a decision on the RWA partners and the external protocols where the AMOs are deployed. On V3, the FRAX governance system will gain more control over the protocol.

Oracles tracks the price of FRAX, the IORB (Federal Reserve Interest on Reserve Balances), or real-world assets in the FRAX collateral system. When the oracle reports an increase in the IORB, the AMO utilizes the RWAs held by FRAX protocol partners. When the oracle reports a decrease in the IORB the AMO will move to re-balance the system using overcollateralized loans on Fraxlend and other crypto assets.

In summary, the FRAX V3 intends to create a fully collateralized stablecoin system and make the FRAX stable coin non-redeemable, just like fiat currencies. 

Frax Shares (FXS): Governance

Frax Shares (FXS) is the governance and utility token of Frax Finance. Unlike FRAX, it is not pegged to any value point and therefore, its value is subject to market forces. FXS plays a major role in the project’s governance, where users can lock up their FXS for up to four years for four times the amount of veFXS (i.e. locking up 100 FXS for 4 years returns 400 veFX). While every veFXS is equal to 1 vote in governance proposals, the veFXS balance will eventually decay from 4 to 1 veFXS after 4 years, at which time users can redeem their veFXS for FXS. veFXS also gives users additional boosts when collecting certain farming rewards. 

As a governance token, veFXS holders participate in voting events to decide on changes to the project, such as the decision to onboard FinresPBC as FRAX v3’s offchain RWA partner. However, the team believes that “the less parameters for a community to be able to actively manage, the less there is to disagree on” and the team “(takes) a highly governance-minimized approach to designing trustless money in the same ethos as Bitcoin.”

Frax Ether (FrxETH): Liquid Staking on Frax

Frax Ether is Frax’s Ethereum liquid staking and stablecoin system. Whenever ETH is deposited into Frax Ether, frxETH is minted to the user, and the ETH is staked by the protocol and is used to earn staking rewards. Unlike other liquid staking providers like Lido and Rocketpool, where users earn rewards in stETH or rETH, Frax uses two tokens: frxETH and sfrxETH. 

FrxETH is pegged 1:1 with ETH, and essentially is similar to a stablecoin, as it is not a yield generating asset. To earn yield on frxETH, users have to deploy it elsewhere, or deposit into the sfrxETH vault to start earning staking yield. This means the less frxETH is staked, the more sfrxETH stakers can earn since the same amount of rewards is distributed to fewer vault owners, which lets sfrxETH offer higher yields than its competitors. At time of writing, Frax Ether offers 3.91% APR to Lido’s 3.3%. 

The Frax Finance Ecosystem and Subprotocols

As mentioned above, Frax Finance is also focused on liquidity and lending markets along with stablecoins, and the ecosystem also consists of the following subprotocols:

Frax Price Index (FPI)

FPI is a stablecoin pegged to the US Consumer Price Index, which is based on a basket of real-world consumer items, and is intended to hold its purchasing power through on-chain stability mechanims. According to Frax, FPI also serves as a unit of account, where denominating DAO treasuries and measuring revenue in FPI along with benchmarking performance against an FPI trading pair helps stakheolders gauge whether value accrual is actively growing against inflation in real world terms.

Fraxswap

Fraxswap is a decentralized exchange in the Frax ecosystem, its design is based on the Uniswap V2. Fraxswap uses a time-weighted variant of the AMM (TWAMM). Unlike the AMM, TWAMM allows users to permissionlessly swap crypto assets over a stipulated time. That is, instead of swapping assets instantly, users can schedule assets to be swapped over a number of blocks. For instance, users can submit an order to the system to trade 5 ETH over the next 2,000 blocks. To execute this order, the TWAMM splits the 5 ETH trade into smaller sub-orders which will be executed over the stipulated number of blocks.

FraxSwap is designed this way to enable the protocol to utilize the exchange for its stablecoin system. Using the TWAMM, Frax Finance claims that the protocol can stabilize the price of one asset by acquiring a specific collateral asset over a prolonged period or acquiring the asset itself. For instance, the protocol can commit the recurring profits made from the algorithmic money market into periodically purchasing and burning FRAX to keep the system stable. 

Fraxlend

Fraxlend is a money market in the Frax Finance ecosystem. On Fraxlend, lenders commit assets to the lending pool and receive fTokens. Assets committed to the lending pool are known as Asset tokens. fTokens are interest-bearing ERC-20 tokens and can be redeemed for asset tokens. The interest earned on fTokens is determined by the interest rate which is in turn determined by the available capital to loan. The interest is paid by the borrower. Interest rates typically climb as more borrowers request funds from the lending pool.

 To borrow an asset from the pool, borrowers lock up tokens known as collateral assets and receive a desired token. A borrower’s loan position has a loan-to-value (LTV) ratio. LTV ratio is the ratio between the Collateral asset and the Asset tokens. The LTV ratio changes when the value of the collateral asset or the asset token changes. Fraxlend features an oracle protocol that feeds the lending protocol with the value of assets in the lending pool and the collateral assets.

When a borrower’s LTV increases beyond the maximum LTV, the loan is considered unhealthy. The borrower can maintain the loan by adding more collateral assets or paying the interest and redeeming the loan. However, when the LTV ratio reaches the maximum level, anyone can redeem the loan by repaying it and claiming the collateral assets. This is the liquidation strategy of Fraxlend, which is meant to keep the whole protocol healthy and in operation.

FraxFerry

FraxFerry is Frax Finance’s interoperability protocol. FraxFerry executes asset movement between exclusive networks. Frax Finance claims that FraxFerry’s approach is effective in curtailing the alarming bridge hacks. A major improvement in the FraxFerry is the inclusion of a 24-hour lock period for bridging requests. How this works, the FraxFerry protocol features a ‘captain’. The captain is the validator, when a user makes a bridging request, the captain screens the transaction to rule out foul plays.

The transaction is then subjected to a 24-hour probation period. During this period, other role players in the protocol, known as ‘crew members’ screen the transaction further. If no issues are found after the probation period, the transaction is finalized as the ‘Ferry’ ships the assets to the target chain. During the probation period, the details of the transaction can be changed. The multi-sig will move to block any irregular bridging request.

Frax Roadmap

Frax Finance is still in development at the time of writing. Here are some notable events that could take place in the protocol in the near future.

Frax V3

Beyond the FRAX v3 stablecoin, Frax Finance is also deploying a series of other Frax v3 products, such as sFRAX, which is somewhat similar to MakerDAO’s DAI Savings Rate, which gives DAI holders exposure to Treasury yields. 

sFRAX is a staking vault that taps into the corresponding hike in Treasury yields, where users can deposit sFRAX and receive 10% yield that would eventually shrink to around 5.4%, the current IORB rate. 

“In order to complete a dollar-pegged stable coin, you need a way to bring the Fed yield on-chain.”

– Sam Kazemian, co-founder of Frax

There is also Frax Governance, which is aimed at decentralizing Frax Protocol operations. Previously, most actions were taking by key Frax stakeholders through Gnosis Safes, with the expectation that these stakeholders would not act maliciously and that external actors won’t force them to execute malicious actions. 

However, with the introduction of Frax Governance, Frax Protocol is only controlled by veFXS holders through onchain governance, with veFXS holders having the fnal say over everything in the protocol. 

FraxBonds are also coming to the Frax Finance ecosystem as part of the upgrade to V3. FraxBonds (FXB) are FRAX stablecoin debts at a specified time. FRAX holders can buy FRAX at a discount at a given time through bonds; however, the discounted Frax will go through a period of maturation before they are available for redemption, giving investors the opportunity to earn low-risk profits just through buying FXB and waiting for it to reach maturity. 

FraxChain

According to information from the Frax Finance team, FraxChain is scheduled to launch in 2024. FraxChain will be an EVM-compatible Layer 2 network on the Ethereum blockchain, with frxETH as its gas token. 

By developing an execution layer of its own, Frax Finance hopes to create a flexible platform for the protocols in its ecosystem. The basic functionality of the FraxChain is similar to other Layer 2 networks, although Frax Finance will take a hybrid approach for its Layer 2. The hybrid network will combine the strength of optimistic and zero-knowledge rollup technologies. The zero-knowledge proofs will be used to verify the authenticity of transactions on the FraxChain. Frax Finance hopes to develop a network that lets its protocols thrive. Users could also enjoy cheaper fee and faster transactions while also receiving the security and decentralization benefits of zk-rollups. 

Final Thoughts

Frax Finance started as a stablecoin protocol, and has since evolved to include an entire ecosystem, including other key DeFi offerings like liquid staking, DEXs, lending, and even its own Layer 2 chain. With its v3 initiatives like sFRAX and FXB, Frax Finance is channeling treasury yields to the crypto industry, offering higher low-risk yields. Also, by moving away from USDC collateralization for FRAX, Frax Finance is also lowering its third-party risks while introducing a new method of peg maintenance through AMOs, RWAs, and governance actions. 

However, Frax Finance is not without competitors in addressing the Trinity of stablecoins, liquidity systems and lending: Aave and Curve are already launching their own stablecoins, suggesting an industry-wide shift in favor of this trend.

Finally, not that this article is only for educational purposes and not financial advice, and featuring a project is also not a recommendation or an endorsement in any way. Always do your own research before investing in any protocol.

https://www.coingecko.com/learn/stars-arena-avalanche-socialfi-crypto

What Is Stars Arena and How to Use It

Stars Arena is a social finance platform on the Avalanche blockchain. It is similar to friend.tech as they both let users buy shares of Twitter (X) personalities, but Stars Arena has additional features like tipping and public discussion threads. To use Stars Arena, users can sign up with their Twitter (X) account and start interacting with personalities on the platform. 

On October 6, there was a major security breach. Do your own research to ensure the platform is safe before depositing any tokens into the protocol. 

Key Takeaways

• Stars Arena is a social finance (SoFi) platform on the Avalanche blockchain that was launched on September 27, 2023, by a developer named ‘theBuilder’ on Twitter (X).

• Stars Arena is a fork of friend.tech and features similar monetization strategies of enabling users to sell and trade shares, turning users’ influence into financial assets and using market dynamics to determine the value of these assets.

• Stars Arena does not require any deposits or referral codes for users to access the platform, and tips and Tickets are transacted in AVAX, although depositing funds is currently disabled due to an exploit that resulted in a loss of around $3 million in funds.

Thanks to the Social Finance (SoFi) trend which has continued to develop since the launch of friend.tech, the crypto space is witnessing the emergence of decentralized applications that are focused on engineering new web3 alternatives to social media. 

DefiLlama reports an excess of $47 million worth of crypto assets locked across the 10 tracked SoFi platforms. Base chain’s Friend.tech dominates with over 97% control of the recorded SoFi TVL. In second place was Avalanche network’s fast-growing Stars Arena with a high of $2.78 million before a security breach and exploit occurred.

Stars Arena has climbed to this height within 2 weeks of its launch. Data from DappRadar shows that their are over 18,000 unique active wallets at the time of writing. According to data from Dune analytics, about 10,000 of these wallets were created between October 3-4. Stars Arena has gotten busy with a high of 250K transactions executed daily on the platform and cumulative volume of almost $5 million. 

Stars Arena has seen some rapid growth, attracting some relatively popular influencers from social media platform X. But what is Stars Arena?

Introduction to Stars Arena

Stars Arena is a decentralized social media platform on the Avalanche network. It is focused on offering creators a platform to connect with their audience, while also offering monetization facilities through tokenization and asset trading. It was created by a developer who goes by theBuilder on Twitter (X) and released on September 27 2023.

Built an arena.. suddenly people talk to me on twitter.. AMA

— theBuilder (@hannesxda) September 27, 2023

Stars Arena shares a resemblance with social media platform X. Users on the platform are able to make posts (Threads) and interact with other users by commenting on posts. However, Stars Arena gamifies aspects of this interaction in a manner similar to friend.tech.

Stars Arena converts users’ influence to shares. Shares on the platform are known as Tickets. Tickets are a representation of a user’s relevance. StarShares is valued at around 0.0066 for new users, and the share prices grow according to prevailing demand; this is in turn influenced by the user’s popularity. The share owners receive a portion of the trading fees generated from their shares.

Purchasing a user’s Ticket gives the holder the right to connect with the user in a more personal manner. Shareholders can connect to their favorite users through direct messages and any other ways such as restricted posts that are only visible to Ticket holders. Users can also attempt to boost their share prices through personal marketing means, like offering alphas with restricted access.

Features of Stars Arena

Stars Arena is deploying an array of features and strategies to improve user experience and push its solutions to a wider user base. Here are some of these features:

Airdrop

Stars Arena incentivizes users through the Airdrop program, similar to friend.tech. However, where friend.tech points are mainly earned through trading Keys, Stars Arena points include other ways to earn points such as creating posts (Threads), viewing Threads, tipping, and other interactions.

Other ways to earn airdrop points include referrals, trading volume, Ticket price, and tipping volume. 

Airdrop earnings are distributed on a weekly basis. According to information on the platform, the airdrop program started on September 26, 2023, and there is no information on when the airdrop program is scheduled to end.

The potential future airdrop earned by each user is likely to be determined by the airdrop points the users accumulated during the distribution period relative to the total airdrop points accumulated by every other user on the platform.

Referral

Every new user on Stars Arena receives a referral link to enable them to refer their peers to the platform. Users who refer others benefit from the actions of those they refer. Stars Arena claims that 1% of every trade made by new users goes to those who refer them to the platform – that’s why Twitter (X) is full of Stars Arena referral links! Users can share their referral links to any other media outlet. Referrals also contribute to the airdrop points earned by users.

Tickets

Tickets are user shares and the holders’ stake over the concerned account. User shares can go as low as 0.0066 AVAX for new users. Others can trade these shares like any other financial asset while the shareowners earn passively from the trading fees they generate. 

Share prices fluctuate according to demand. Shareholders can send direct messages to users whose shares they own and also gain access to exclusive content like restricted Threads, group chats, and other special privileges, some of which are offered by the shareowners as a way of promoting their shares. Put simply, shares are Tickets to a user’s account on Stars Arena.

Portfolio

The wallet on Stars Arena is the user’s portfolio on the platform. On the portfolio, users can see their AVAX and manage their earnings on the platform. Users can also export their wallets to other personal wallets like MetaMask by obtaining their wallet private keys from the platform.

Tipping

Users can directly reward other users for their content using the tipping feature. Tips are sent from users’ wallets. For example, if you see a post that you think deserves recognition, you can send the writer a tip.

With Stars Arena as an up and coming protocol in the SoFi space, let’s see how it compares against friend.tech, the current leader in the space. 

Stars Arena vs  Friend.tech

One thing common between both platforms is the intention to create a sovereign social media application. Both platforms gamify user influence through shares. The basic design of friend.tech is very similar to that of Stars Arena. Both applications tokenize users’ presence and their prices respond to demand and supply. 

Both applications are available on mobile through the PWA (Progressive Web Application) version of the applications. Users can add the web version of the application to their devices and enjoy a hybrid of web and native application functionality. Stars Arena’s airdrop strategy is also similar to that developed by friend.tech, with a focus on earning points. 

Network

Friend.tech runs on the Base network, a Layer 2 network on Ethereum while Stars Arena is deployed on the Avalanche network. Both applications operating on different platforms expose them to different user bases for their first set of users. In Stars Arena’s case, the protocol has received support and coverage from the Avalanche project on Twitter (X), with the blockchain launching its own account on Stars Arena.

Access 

Access to Stars Arena is much easier, relative to friend.tech. In an attempt to curb foul play in user registration, Friend.tech launched as a referral-based application and has continued this way.  New users can only start using the application if they are able to obtain referral codes from existing users. At the time of writing, new users still need to obtain referral codes to use the platform. Friend.tech further limits access through compulsory deposits, requiring a minimum deposit of 0.01 ETH to use the platform. 

In comparison, Stars Arena removes these access barriers to offer easier access for new users. You can simply create an account on Stars Arena by connecting your Twitter (X) account to the platform. There are also no compulsory deposits to get started. New users’ shares are set at 0.0066 AVAX each and start to grow from this price point.

Shares System

As stated earlier the starting price for new user shares on Stars Arena is 0.0066 AVAX; on friend.tech the starting price of new user shares is determined by the user’s Twitter data. That is, the application obtains information about the user’s followership and activities on Twitter (now X) and uses it to stipulate the starting price of their shares. This is different from the design for Stars Arena.

Want to explore Stars Arena? Here’s how you can start using the application.

How to Start Using Stars Arena

1. To start using the application simply visit the platform.

On mobile, you will get a prompt to install the PWA application. You can ignore this and use the website version if you prefer.

2. Click Login with Twitter.

3. This connects to the Twitter account logged in on your device.

4. Review the authorization request and accept it if you agree with them.

5. Your Stars Arena Account is now created with your Twitter details.

You can now start exploring the platform.

To discover users, you can click on the Search icon to either search for a specific account, or you can browse and discover users of interest by clicking through the different tabs available.

Stars Arena Exploit

On October 6, Stars Arena was drained of almost all locked funds – a total around $3 million worth of AVAX tokens due to a major security breach in its smart contract. The protocol announced on social media of the occurrence of the security breach, and warned users not to deposit funds. In another update on 12 October, the team claims to have recovered around 90% of lost funds after reaching an agreement with the individual responsible for the breach.

There has been a major security breach with the smart contract.

We’re actively checking the issue.

DO NOT deposit any funds.

Stay tuned for updates.

— Stars Arena (@starsarenacom) October 7, 2023

The protocol has since moved funds to a new Gnosis Safe multisig wallet with 3 out of 6 signatures required under the control of Stars Arena team members, and is overhauling their security infrastructure. They are also collaborating with Paladin Blockchain Security, a security firm that has conducted audits on six of Trader Joe’s products, a move that was met with positive reception from their community.

We’re excited to announce our collaboration with @0xPaladinSec, a leading authority in blockchain security solutions.

This initiative reinforces our steadfast commitment to elevating the security infrastructure of our platform as recommended by key community leaders.

We’re… pic.twitter.com/sNS59YF5IZ

— Stars Arena (@starsarenacom) October 8, 2023

At time of writing, while partial access to Stars Arena is restored, users still cannot deposit (and are advised against depositing) funds. 

Final Thoughts

Social finance applications are suggesting a different way to use social media. We have seen this in similar applications in this sector. Creators are offered a platform to not only maintain full control of their interaction with their audience but also enjoy monetization opportunities based on their clout. As these applications continue to evolve and get adopted, we learn how feasible these strategies are especially where it concerns effective communication and of course, monetization. Stars Arena has already gained traction and adoption from Twitter (X), as seen from its growth. 

Having said this, it is important to note that there is no clear information on how these applications manage user data, or how cryptocurrencies deposited on the platform are stored and managed. It is therefore important that users invest time to understand the applications more before using them. Risk-management strategies are also advised at this stage. Also, note that this is for educational purposes and not financial advice, and featuring specific applications or users is not a form of recommendation or approval. 

https://www.coingecko.com/learn/sui-ecosystem

Projects in the Sui Ecosystem

There are 85 projects listed in the Sui ecosystem, including DeFi, gaming, NFTs and other utility applications. We look at some of the popular applications across DeFi and gaming on Sui and what they offer their users. 

Key Takeaways

• The Sui ecosystem is made up of applications that have integrated into the network. These applications leverage the network’s facilities for their operations.

• The Sui blockchain supports decentralized applications in the areas of decentralized finance, gaming, NFTs, and more, offering developers and users faster and cheaper transactions.

• The projects deploying decentralized solutions in these areas on the Sui network hopes to utilize facilities provided by the network while delivering valuable use cases to their users.

The Sui network went live in May 2023, and since then, developers have continued to deploy decentralized applications on the network. Sui’s support for varieties of applications has been helpful in the growth of its ecosystem. On May 7, 2023, just four days after the mainnet was launched, the Sui network reached a record TVL of $36 million. At time of writing, TVL on the platform is over $25 million, based on the assets locked on different DeFi protocols on the network.

Source: DefiLlama

In September 2023, Artemis reports an average of 150,000 active addresses on the network and a daily transaction count in excess of one million. This gives a hint of user activity on the network as developers and blockchain enthusiasts continue to explore the network and the applications in its ecosystem.

Now, let’s take a look at some of these applications.

DeFi

With over $25 million in locked assets shared between decentralized finance applications on the Sui network, here are some of the top applications, based on TVL at the time of writing.

Cetus Protocol

Cetus Protocol is a multichain decentralized exchange on the Sui and Aptos networks, it offers decentralized asset exchange and liquidity mining opportunities to users. Cetus leverages AMMs but modifies it to develop a system it claims to offer a better use for liquidity pools. At time of writing, Cetus’s TVL on Sui is $9.2 million.

Cetus’s adaptation of the AMM is known as the CLMM (Concentrated Liquidity Market Maker). The CLMM allows liquidity providers to provide liquidity at a defined price ranges. In contrast to the AMM where users simply commit assets to the liquidity (and let the protocol manage asset availability and price levels), the CLMM has a varying availability of tokens at different price points. According to Cetus protocol, this approach allows it to deliver a powerful and flexible underlying liquidity network that makes trading easier for any users and assets.

Cetus also operates a launchpad where new projects on the Sui network can host their token offering event and launch their project with support from the Cetus Protocol. CETUS is the official token of the network. It is used to run the project’s incentivization and governance programs. Liquidity providers on the protocol receive CETUS as part of their rewards. CETUS holders can also lock up their tokens to receive xCETUS. xCETUS is used on the governance portal to vote on improvement proposals. CETUS is tradable on centralized exchanges (including Kucoin and Mexc) and decentralized exchanges on the Sui network. See active CETUS trading pairs.

NAVI Protocol

NAVI brands itself as the first Native One-Stop Liquidity Protocol on the Sui network. It is a decentralized money market that allows users to borrow assets without the need for intermediaries. At time of writing, NAVI Protocol’s TVL on Sui is $4.4 million.

It connects lenders to borrowers through an overcollateralized loan lending protocol. Like similar decentralized applications, borrowers commit funds valued higher than the amount they wish to borrow as collateral, and pay interest as delineated by the protocol. Lenders, on the other hand, commit their assets to the protocol and receive interest from the borrowers. NAVI features a liquidation algorithm that keeps the lending protocol ‘healthy’ through liquidators who agree to bear the cost of bad loans.

NAVI Protocol also runs a bridging facility powered by Wormhole. Users on the platform are able to communicate with other networks and move assets through the bridge. NAVI is the native token of the NAVI Protocol and is used in the project’s governance. NAVI holders vote on changes to different aspects of the project including setting interest rates, adding new assets to the protocol, and changing the collateralization ratio. Holders also enjoy extra benefits like discounts on fees and the opportunity to participate in staking programs. 

Kriya DEX

With $2.4 million in locked assets at the time of writing, Kriya DEX is the third largest DeFi project on the Sui network by TVL. Kriya is a suite of DeFi products. It offers an array of services focused on aggregating liquidity in the Sui ecosystem, enhancing capital efficiency and offering a smooth user experience to institutions and individual users. 

Kriya DEX is a decentralized perpetuals and options trading platform. Derivatives traders can execute leveraged trading on the platform through the decentralized perpetuals trading platform. At the moment, trading is live for four perpetual pairs on Sui mainnet, with 20x leverage supported. 

Kriya also offers other products as well, including a bridge powered by Wormhole. The Kriya bridge enables users to communicate with external networks and move assets seamlessly. It also offers decentralized swap services for instant exchange of assets on the Sui blockchain.Kriya also runs an OTC service. Through the OTC service, Kriya claims to offer users a way to negotiate and execute large sales without having a significant effect on the orderbook. Users can leverage the escrow service to host their assets on the OTC platform while interested traders send quotes for the assets. 

The project has also shared plans for a native token – KRIYA. According to the roadmap, the token will be used to run the Kriya DAO, return value to holders through buybacks and revenue distribution, and grow the finances of the Kriya project.

Aftermath Finance

Aftermath is a decentralized exchange on the Sui network. With over $2 million worth of crypto assets locked on the platform, it is the fourth largest DeFi platform on the Sui blockchain. 

Aftermath Finance features an asset bridge powered by Wormhole and Celer. It claims that users can easily and securely move their assets between over six blockchain networks using its bridge facility. Aftermath Finance’s AMM-powered DEX allows users to swap their assets. It claims to give users a “CEX experience on a DEX”. It offers benefits to liquidity providers through fees from the platform users. It also claims to offer high extra rewards to liquidity providers through its yield farming program.

1/ Liquidity mining incentives are now being emitted on Aftermath!

Participating is easy, just deposit liquidity into any of the supported pools and stake your LP token to earn #SUI. 🚀

🧵 Follow along to start earning rewards. ⬇️#Suinami #SuiEcosystem #Bullshark pic.twitter.com/yxpwo9P2pD

— Aftermath Finance (@AftermathFi) September 6, 2023

Gaming

Developers are also deploying decentralized games on the Sui blockchain. Some notable GameFi projects on the network include:

SUI 8192

Thanks to SUI 8192, the Sui network experienced a spike in usage in the final weeks of July 2023. Sui 8192 is a puzzle game on the Sui network. It is developed by Ethos, an SUI network Wallet provider. SUI 8192 design and gameplay are inspired by the popular 2014 browser-based puzzle game 2048. Sui 8192 gameplay is quite a straightforward one, players combine tiles by using their device navigation buttons to move the tiles until they get the number 8192. Each move is a transaction on the Sui network and players pay a fee to move tiles. The game uses the NFT technology to track and record player progress. For every significant checkpoint or milestone, it mints an NFT.

SUI 8192 is open to everyone on the Sui network and participation is free, although there are restrictions on underage players and users in Puerto Rico. Further research into the Terms and Conditions shed light on some important participation and reward rules. The gameplay is regulated by the administrators who reserve the right to disqualify entries or withhold winners’ rewards based on some predetermined rules. Administrators can also cancel an event.  Rewards for winners are distributed in SUI tokens. A winner must respond within 48 hours and must claim their rewards within 3 business days or run the risk of forfeiture. 

Grand Cross: MetaWorld

Netmarble, South Korea’s largest mobile gaming company, hopes to bring Grand Cross: Metaworld, its metaverse game to the Sui network through its subsidiary Netmarble F&C. In partnership with Mysten Labs, the gaming firm, valued at $11 billion hopes to bridge barriers and create easy access for aspiring V-tubers.

Mysten Labs 🤝 Grand Cross: Metaworld

📣We’re excited to officially partner with Netmarble F&C, bringing Grand Cross: Metaworld to life on @SuiNetwork! https://t.co/eCCQKdZjL5

— MystenLabs.sui (@Mysten_Labs) December 16, 2022

The partnership with Mysten Labs will allow Netmarble to leverage the Sui blockchain’s promised low cost of usage, efficiency, and security. Netmarble will deploy Grand Cross to the network and work towards bringing an immersive experience to V-tubers on the Sui network. Netmarble executives cite the ‘great infrastructure’ that the Sui network provides as the major reason for partnering with the project for their gaming project.

Grand Cross: Metaworld is a metaverse game where gamers can create and manage their own spaces, where thousands of users can hang out in virtual cities. Netmarble claims that the Grand Cross game will feature 4k anime-style graphics and will utilize decentralized technologies like NFTs to deliver a satisfying experience for gamers. NFT technology will be used to develop and store game items like user characters and costumes.

V-tubers will be able to adapt to the environment it presents and utilize V-tube creation tools provided by Netmarble. These tools, according to Netmarble, will be optimized for efficiency, cost-saving and cost-effectiveness. Grand Cross is scheduled for full launch in the last quarter of 2023.

Bridge

Bridges allows cross-network and protocol communication. For the Sui network, bridges in its ecosystem allow users from other networks to transfer their assets to Sui and also handle asset movement in the opposite direction. Bridges in the Sui ecosystem include:

Wormhole

Wormhole is an interoperability protocol that enables communication between blockchain networks. It claims to have developed a message passing protocol that enables networks to utilize the resources of external networks. Wormhole is applicable in vast areas including cross-network exchange of assets and cross-network governance. Bridging protocols built on Wormhole are in fact, an extra utility for the protocol as it claims to be more relevant for even more complicated inter-network communication scenarios.

Wormhole has integrated the Sui network. This integration allows independent applications on the Sui network to develop asset bridges using the wormhole SD kit. Some of these applications include DeFi protocols like Kriya DEX and NAVI Protocol. Wormhole claims to streamline the process of developing communication protocols through its SDK. Projects can build asset bridges in a few minutes and with minimal technical abilities. Wormhole has also integrated several other blockchain networks including Aptos, Algorand, Solana, EVM networks like Fantom and Polygon, and Layer 2 networks like Optimism. 

Wallet

Ethos Wallet

Ethos is a wallet provider for the Sui network. It is also the project behind the Sui 8192 game and two other tile games deployed on the Sui network. The Ethos wallet enables users of the Sui network to connect to the network, perform specialized and routine activities, and also manage their assets on the network. 

Ethos wallet comes in browser extensions that are available for Chrome, Edge, and Firefox browsers. Ethos wallet is a full Web3 wallet, users can connect to decentralized applications deployed on the Sui network using their Ethos wallet. Ethos presents a highly customizable wallet interface for its users and claims to offer a secure and seamless connection to the network and dApps in the ecosystem.

 The project also recently announced the mobile version of the wallet which is still in development at the time of writing. 

Final Thoughts

This article features selected applications on the Sui ecosystem based on their popularity and TVL. This is not exhaustive of the applications deployed on the network, even at the time of writing. The Sui ecosystem will likely continue to expand as more applications get deployed to the network. 

It is also important to note that these features aren’t a form of endorsement nor recommendations. The sole intention is to describe how these applications are utilizing the technology of the Sui blockchain. It takes a look at how they are pushing the boundaries and scaling the network’s adoption. Investing in or using any of these protocols should be a product of adequate personal research.

Having said this, users of these applications will hope to benefit from the promised fast and cheap transactions on the Sui network while developers continue to explore opportunities like syntax level security and efficiency that the network claims to offer. Always do your own research and note that this article is only for educational purposes and not financial advice.

https://www.coingecko.com/learn/complete-guide-to-using-trust-wallet

How to Use Trust Wallet

You can use Trust Wallet to send and receive cryptocurrencies, and also use fiat money to buy crypto. Other features of Trust Wallet includes cryptocurrency swaps on decentralized exchanges, and earning crypto through staking. 

Key Takeaways

• Trust Wallet was launched in November 2017 and has since then grown into one of the most widely used cryptocurrency wallets, with a reported user count of over 10 million. The mobile version has been downloaded over twenty million times across official application stores.

• It supports over 4.5 million crypto assets and over 70 different blockchain networks including Bitcoin and Ethereum at the time of writing.

• The Trust Wallet browser allows users to browse and connect to web3 platforms through their Trust Wallet mobile application, and it also offers swaps and staking options. 

• Trust Wallet also released a browser extension for personal computers.

What Is Trust Wallet?

Trust Wallet is a non-custodial software (hot) wallet application for holding crypto assets and executing transactions on the blockchain. It is a multi-asset and multichain wallet that supports over 4.5 million crypto assets and over 70 blockchain networks. Supported assets include native coins of supported networks, ERC-20 tokens and NFT token standards for the Ethereum blockchain and similar smart contract tokens for other EVM networks. Trust Wallet also supports smart contract tokens on non-EVM networks. 

Trust Wallet claims to offer cryptocurrency investors a tool to easily transact cryptocurrency and communicate with multiple blockchain networks. As a non-custodial wallet, users are in custody of their own wallet’s private keys and the wallet doesn’t store users’ details.

Trust Wallet launched in November 2017 with its mobile application designed for smartphones. On July 31 2018, Trust Wallet was acquired by Binance, the largest crypto exchange by daily volume. Trust Wallet has reportedly gained over 60 million users since its launch and claims to have over 10 million active users. 

To further improve user experience, it offers inbuilt financial facilities like an asset swap platform and an on-ramp crypto purchase feature that lets users buy crypto with fiat money. Other extra services on the Trust Wallet include asset staking platforms and wallet-exchange connection services. The mobile application features a Web3 browser that allows users to access and connect to decentralized applications (dApps) from the comfort of their wallet. TWT (Trust Wallet Token) is the native token of the wallet.

What Is TWT?

Trust Wallet announced the launch of the Trust Wallet token in February 2020. TWT token was minted first on the Binance Beacon Chain (BNB chain) as a BEP2 token and then launched on the BNB Smart Chain (BSC) as a BEP-20 token. The launch was followed by an airdrop of the TWT token to existing users. The TWT token doubles as the incentivization and governance token of the Trust Wallet project. Trust Wallet hopes to scale the application’s adoption through promotional activities powered by the TWT token. 

TWT holders also decide on improvements to the project through the Trust Wallet DAO. The DAO votes on new features to be added to the application, new networks to develop support for, and other aspects of the project as defined by the project’s governance system. TWT holders also enjoy discounts on Trust Wallet paid services like on-ramp purchases.

TWT can be traded on centralized exchanges (like Binance, MEXC, and gate exchange) and decentralized exchanges (like PancakeSwap, Uniswap, and ApeSwap). See active trading pairs for TWT.

Installing and Setting up Trust Wallet

To start using Trust Wallet, the application must be downloaded and installed on your device. Trust Wallet allows you to import your existing wallets for every supported blockchain network; however, every new wallet created on the application is multi-chain.

1. Visit your device’s application store. Trust Wallet is available on the Google Play store for Android devices and the Apple store for iOS devices. Download and wait for the application to install.

2. After installation, open the application.

To Import an Old Wallet

1. If you already have an old wallet you wish to import, click I already have a wallet.

2. Select your wallet type. Select Multi-Coin Wallet if your wallet is a multichain wallet like MetaMask. Otherwise, scroll down or use the search feature at the top right corner to search for the blockchain network.

3. On the following page, enter your wallet’s secret phrase and choose a name for your wallet.

4. Click Import to complete.

To Create a New Wallet

If you wish to create a new wallet:

1. Open the application, and press CREATE A NEW WALLET.

2. Agree to the terms and press CONTINUE to proceed

3. On the next page, write down the provided secret phrase in the right order and store it properly, ideally offline and on crypto steel for added security. Press Continue to proceed.

4. On the page that follows, verify your secret phrase by clicking on the words in the order in which they appear on your secret phrase.

5. Click Done to complete.

Your multi-chain Trust Wallet account is now ready for use.

Next, let us explore what you can do with your Trust Wallet account.

How to Add New Networks to Trust Wallet

To interact with any network from your Trust Wallet, these assets and their networks must be visible on your Trust Wallet interface. Let’s add a new network and asset.

Many networks are already preinstalled. Check if the network is already available on your dashboard. Otherwise, you will need to add the network.

1.  To add a new network, press the Menu icon on the top right corner of your wallet.

2. Search for the network you wish to add using the search bar.

3. Toggle the switch button to add the network.

Adding Smart Contract Tokens Manually

If the token you want to add is not available in the preset list, you can also add them manually.

1. Click the Menu icon at the top right of your dashboard. 

2. To add a smart contract token, navigate to the network selection page.

3. Click the + sign in the right corner beside the search bar.

4. Select the network where the token operates and enter the token details. You can retrieve token details from CoinGecko’s or GeckoTerminal’s token pages.

5. Click Save to complete.

Adding a New Network Manually

1. To add a new EVM or Cosmos network, navigate to the network section.

2. Tap Switch Network to select the network type.

3. Enter the network details and click Save to complete.

Import Networks From Chainlist

You can also import networks using Chainlist. 

1. Select Chainlist on the top right box.

2. Search for the network by scrolling down or entering the network name into the search bar.

3. Select the network by tapping on it. The details are imported automatically.

4. Tap Save to complete.

How to Send and Receive Tokens With Trust Wallet

P2P transaction is the most basic operation you can perform with Trust Wallet. You can receive and send any supported crypto assets with a few clicks. 

To Receive a Crypto Asset Using Trust Wallet

1. Choose from the list of tokens the asset you wish to receive.

2. Select Receive from the asset page.

3. The sender can scan the QR code to obtain the wallet address; you can also copy the address by clicking Copy.

4. Tap Save to complete.

4. Enter the copied address as the recipient to send the asset to your wallet.

To Send a Crypto Asset Using Trust Wallet

1. Tap on the asset you wish to send

2. Click Send from the asset page.

3. Enter the receiver’s wallet address.

4. Enter the amount you wish to send.

5. Enter a memo where required.

6. Tap Continue from the top right corner.

7. On the confirmation page, verify the transaction details and press Confirm when you are ready to send crypto. 

To Receive Crypto Assets Directly From Your Exchange

Using Trust Wallet, you can connect to your account on supported centralized exchanges –Binance and Coinbase – to receive crypto assets. This feature is only available for assets listed on the exchange.

1. Tap on the asset you wish to receive.

2. Select Receive from the asset page.

3. On the address page, select Deposit from Exchange at the bottom of the page. This opens up a pop-up selection.

4. Select the exchange you are receiving from.

This opens your exchange account.

You can now execute your transfer from your exchange account.

How to Buy Cryptocurrencies With Trust Wallet

Trust Wallet’s on-ramp services allow you to purchase cryptocurrencies with fiat money. To purchase a crypto asset:

1. Tap on the asset you wish to purchase.

2. Click Buy from the asset page.

3. To select the currency you wish to pay in, press the currency ticker from the top right corner.

4. Select the currency.

5. Enter the amount you wish to spend on the purchase.

6. Select the third-party provider on-ramp platform you want to use.

7. Click Next to continue.

You will be redirected to the provider’s platform to complete the purchase

The procedures might differ for each provider.

8. Follow the prompts to complete the purchase.

Other Features of Trust Wallet

Beyond sending, receiving and buying cryptocurrencies, the Trust Wallet application also comes with additional features, such as swaps through decentralized exchanges and staking crypto to earn, or using the Trust Wallet browser on mobile to discover and connect to decentralized applications. 

How to Swap Cryptocurrencies With Trust Wallet

You can exchange crypto assets directly from your Trust Wallet using the Swap feature. The swap feature connects to decentralized exchanges to enable AMM-powered swaps from the Trust Wallet interface.

1. Select Swap from the bottom menu of Trust Wallet.

2. On the Swap page, select the assets you wish to exchange and set the amount you wish to swap.

3. Select Preview Swap to continue.

On the next page, review the swap details and complete.

How to Stake Crypto With Trust Wallet

You can also stake crypto on Trust Wallet, with APRs of up to 35% at time of writing.

1. Select the Earn icon on your Trust Wallet dashboard

2. This opens up a list of cryptocurrencies you can stake to earn crypto, sorted by APR

23. Select the token you are interested in staking and review the staking terms. The lock time designates the length of time your tokens will be inaccessible during staking. Click Stake to continue.

4. In the following screen, enter the amount of tokens you wish to stake, and click Continue. You can also choose between different staking providers by clicking on the Validator section below.

5. Finally, review the details of your transaction and proceed to stake.

Trust Wallet dApp Browser

The Trust Wallet mobile application is equipped with a browser to allow users to connect to decentralized applications from the mobile app.

You can access the dApp browser by pressing the Browser icon from the bottom of your wallet homepage.

On the browser page, you can find some previewed dApps. You can press any of these to connect to the application.

To visit a dApp from your Trust Wallet application:

1. Enter the link to the dApp on the URL input box or use the search feature to discover dApps.

2. Click Connect Wallet from the dApp’s interface.

3. Select Trust Wallet. This usually sends a prompt to your wallet to approve the connection.

4. Press Connect from the prompt to complete.

For multichain dApps, you can switch to any supported network from the dApp’s interface.

You can also do this by pressing the Kebab menu (three vertical dots) from the top right corner of the browser.

Click on networks to select the network you wish to connect with.

Note that you can only use the dApp browser with networks integrated into your wallet. Refer to earlier parts of this article to see how you can manually network that are not pre-installed on Trust Wallet.

Trust Wallet Browser Extension

Trust Wallet is famed for its mobile application. However, the wallet extension for the Chrome browser has also gained over 500,000 users. The Trust Wallet browser extension can also be installed on Edge and Firefox browsers.

1. You can install the extension by visiting your browser’s application store or by downloading it directly from the Trust Wallet Website.

2. After installation, proceed to import your old wallet or create a new one. You can also connect your hardware wallet to the browser extension.

3. With your wallet created, you can now use your Trust Wallet on your desktop browser. Most of the features are similar to MetaMask and other browser extension wallets.

Frequently Asked Questions (TWT) about Trust Wallet

How Safe Is Trust Wallet?

Trust Wallet is just as safe as any other hot wallet out there. The developers promise full self-custody and claim that users are the ones with the knowledge of their private keys and wallet details. Apart from these, Trust Wallet is connected to the internet like other hot wallets and is designed for routine use. 

Hot wallets are the risk of security breaches like phishing. While Trust Wallet itself might be free from breaches, many other security risks are out of the developers’ control. It is therefore advised that users store only a small amount of their crypto assets on their Trust Wallet (or any other hot wallets) and move other less-used valuable assets to cold wallets.

Are There Any Fees to Use Trust Wallet?

Trust Wallet is free to use. You can download Trust Wallet from any official application store and use it for your routine crypto operations. However, there could be additional charges for using other extra services like the on-ramp crypto purchase service. Apart from this, routine operations on the wallet are free of charge at the time of writing.

Final Thoughts

Cryptocurrencies are regarded as a more flexible alternative to money and wallets like Trust Wallet are one of the reasons why it has maintained this reputation. With Trust Wallet and other wallet applications, especially mobile applications, your crypto assets are always within reach. While there are some security risks such as phishing, the flexibility they offer to cryptocurrency investors has never been in doubt. By integrating with smartphones and developing technologies like the QR codes for transactions and biometric login and approval options, Trust Wallet makes P2P transactions even easier and contributes to the adoption of decentralized financial systems.

Having said this, it is important to understand the security risks of storing a significant amount of crypto assets on mobile wallets. While installing the Trust Wallet, ensure that the right wallet is installed. Follow the instructions in this article to set up and start transacting crypto from your Trust wallet. For other operations not covered in this article, ensure that you understand them well enough before performing them. 

Also, note that this article is only educational and is meant to guide users through the basic operations of the Trust Wallet. It is therefore not financial advice or a recommendation of the featured application

https://www.coingecko.com/learn/what-are-metamask-snaps-and-how-to-use-them

How to Use MetaMask Snaps

MetaMask Snaps can be installed directly into your MetaMask wallet from the MetaMask Snaps Directory, and these Snaps can enable cross-chain interoperability and improve wallet security through transaction insights.

In this article, we explain MetaMask Snaps, how it works, and how you can start using the new feature.

Key Takeaways

• MetaMask announced the launch of the Snaps feature on September 12, 2023.

• Snaps allows wallet users to install external applications that can be used on their wallets and add extra functionalities to their wallets.

• Available MetaMask Snaps at the time of writing include a wide range of applications like wallet applications for non-EVM networks, transaction analysis to improve security, and notification applications.

Following the official announcement on September 12, 2023, Snaps emerged as the first product of the MetaMask Flask. Flask is a playground for developers introduced by Consensys, designed to serve as a front for brainstorming, developing, and testing innovative features for the MetaMask wallet.

First significant feature on Flask? MetaMask Snaps. MetaMask claims that Snaps is set to offer new and even more exciting ways to use the MetaMask wallet with features working towards interoperability and utility information solutions. Before you start testing out this feature, let’s take a look at what it is and how it actually works. So, what are MetaMask Snaps?

What Are MetaMask Snaps?

MetaMask Snaps lets you add extra functionalities to your wallet. Put simply, MetaMask Snaps lets you integrate a Snap into your wallet. A Snap is a third-party application developed for the MetaMask wallet, where users can install Snaps and use them alongside their MetaMask wallets. MetaMask claims that Snaps are able to add new possibilities to wallets, including the ability to interact with non-EVM networks from their MetaMask wallet and other routine utility applications like transaction notification and other insight applications.

MetaMask has, over the years, only concentrated on EVM networks, letting users integrate and use new EVM networks by entering and storing the network details. Through Snaps, it claims to be growing past this and opening up a gateway for developers to experiment with other features and extend the usability of the MetaMask wallet beyond Ethereum and EVM networks. Like a browser extension, users can install Snaps, but how do these work with the MetaMask wallet?

How Do MetaMask Snaps Work?

Snaps are permissioned applications; they are javascript programs that run in an isolated environment. Snaps are pre-packaged functionalities that are dependent on the MetaMask wallet, and their properties are activated through permissions which give them access to the user’s MetaMask wallet. Consider them as applications stored in your MetaMask wallet or widgets integrated into a website. Snaps uses the wallet’s facilities, but only on due approval. On installation, users are notified of the required permissions for each Snap, and if permitted, the Snap runs operations as required by the user. Operations could range from simple transaction notifications to connecting to a non-EVM network.

As Snaps interact with users’ wallets, questions could arise regarding the safety of users’ assets. MetaMask claims that Snaps run in a sandboxed environment and the permissions are the only avenue through which a Snap can access users’ wallets. This doesn’t remove the need for extra caution, so always read through the permissions you are granting the Snap.

There are four basic management operations for Snaps: installation, permissions, disabling, and uninstalling. The installation process for MetaMask Snaps is similar to regular application and extension installation. A significant difference is the process of integrating them with your MetaMask wallet. 

At the time of writing, Snaps can only be used in the MetaMask browser extensions and can be installed from the MetaMask Snaps Directory. On installation, your wallet prompts for permission. This process gets the Snap ready for use. You can disable and uninstall a Snap through the Snaps tab under the Settings menu. 

Exploring MetaMask Snaps

You can browse MetaMask Snaps based on their type. MetaMask Snaps are currently split into three categories: 

• Interoperability: These Snaps enable MetaMask users to connect to other supported networks.

• Transaction Insights: These Snaps provide additional information about a transaction you’re about to undertake. 

• Notifications: These Snaps let you stay updated on important information, or offer other communication features like wallet-to-wallet-chats.

At time of writing, the MetaMask Snaps Directory features Snaps that have been audited by the MetaMask team and third parties, with future plans to open up the auditing process to create a permissionless platform. 

Now, let’s look at how to install and disable a Snap using the Tenderly TX Preview Snap.

How to Install a MetaMask Snap

1. Visit the MetaMask Snap Directory, and search for Tenderly (or any Snap you wish to install) using the search bar.

2. Click on the Tenderly Snap (the snap you wish to install) and click Add to MetaMask to start the installation process.

3. Once you click on Add to MetaMask, your MetaMask browser extension opens a dialog. Read through the notice to understand the implications of every installed Snap.

4. Follow the prompts and accept the terms after review.

5. The final dialog is a connection request. Click Connect to accept this and complete the installation process.

How to Disable and Uninstall a MetaMask Snap

Uninstalling a Snap disables the application and removes it from your MetaMask wallet and device. Disabling a Snap only stops it from interacting with your wallet, but the application is still installed and can be enabled at will.

How to Disable a Snap

For instance, let’s disable the Tenderly TX preview Snap we just installed

1. Click the kebab menu on the top right corner of your MetaMask wallet and select Settings.

2. On the settings page, select Snaps to see installed Snaps.

3. Click on the Snap you wish to disable. On the individual Snaps pages, you can find other details including permissions.

4. To disable the Snap, toggle the Enabled button. You can re-enable the Snap through this process.

How to Uninstall a Snap

1. Click the kebab menu on the top right corner of your MetaMask wallet and select Settings.

2. On the settings page, select Snaps to see installed Snaps.

3. Click on the Snap you wish to uninstall.

3. Scroll to the bottom of the page and click Remove to uninstall the Snap. You can also Disconnect the related sites from your MetaMask wallet here.

Now that you understand the basic operations, let’s look at a few Snaps for different functionalities.

Interoperability: Connect to Other Networks

The MetaMask wallet is shifting away from its traditional support for EVM networks alone. With the MetaMask Snap, MetaMask users can now connect to other networks from their MetaMask wallet. Connecting to new and existing networks is as easy as installing a Snap associated with the new network and running it through your MetaMask wallet. 

Notably, a Snap for Bitcoin support has already been developed – ShapeShift Multichain. With applications like this, you can now receive and send Bitcoin from your wallet. The interoperability provided by Snaps isn’t limited to existing network; new non-EVM networks can develop a Snap to allow their users to connect to the network from their MetaMask wallet.

To better understand how this works, let’s install and use the Solana wallet Snap by SolFlare. This will allow us to connect to the Solana blockchain from MetaMask.

Note that you can use this procedure to install any other wallet Snap, although there may be some differences in the individual process.

Installing a Solana Wallet Snap

1. Visit the MetaMask Snap Directory and search for “Solana wallet”.

2. On the Solana Wallet application’s page, click Add to MetaMask from the top right corner of the page.

3. This begins the installation process. Follow the prompts to connect the Snap to your wallet, after reading and understanding the risks involved and permissions required. 

4. Once the installation process is completed, you can now use the Solana wallet from your MetaMask browser extension.

5. You can now use MetaMask as a wallet on supported Solana dApps, like Solend. Once you select MetaMask as the wallet to connect, the Snap will take you through the Solflare wallet setup process.

Transaction Insights: Improving Wallet Security

Trading is the most common use case for cryptocurrency and blockchain technology. However, users often have little or no extra information about their transactions apart from the amount being sent (or received) and the sender’s (or receiver’s) address. Through MetaMask Snaps, developers are able to develop informative applications that provide more insights into transactions.

Information provided by Snaps like these includes a detailed analysis of the safety of the transaction and information on the sender or recipient. Transaction insight Snaps are able to obtain information on the legitimacy of a wallet address and notify users of the likely outcomes of the transaction. These Snaps are embedded into the MetaMask wallet and users can easily obtain this information as part of the transaction confirmation process.

Let’s install and run a Snap that provides transaction insights.

We will be using the Tenderly TX Preview. You can install any other similar Snap from the MetaMask Snap Directory by following the same procedure.

Installing Tenderly TX Preview

1. Visit the MetaMask Snap Directory and search for “Tenderly”.

2. On the Tenderly TX Preview page, click Add to MetaMask from the top right corner.

3. This starts the installation process; follow the prompts to connect the Snap to your wallet. Follow the prompts to connect the Snap to your wallet, after reading and understanding the risks involved and permissions required.  

4. Once the installation process is completed, you can now see a TX preview section on the transaction tabs. However, you will need to create a Tenderly account and connect it to your MetaMask before you can use this feature.

Creating and Connecting a Tenderly Account

1. Visit the Tenderly registration portal to create an account.

2. Confirm your Email and follow the prompts to start your account creation.

3. Visit the Tenderly authorization page to complete the setup process and click Connect to Tenderly Snap.

4. Select Project: The project created while setting up your account will be selected automatically. If you created multiple projects, you can select any of them for this step.

5. Click Connect and follow the wallet prompt to complete.

Using Tenderly TX Preview

The Tenderly transaction insight tab is located next to the transaction details tab on the confirmation page of your MetaMask wallet.

After setting up a transfer, move to the Tenderly TX Preview tab to get more information before executing the transaction, such as whether the transaction is likely to succeed.

Notifications: Chats and Alerts on MetaMask Wallet

In addition to interoperability and transaction insight Snaps, some Snaps on the MetaMask Snaps Directory let you do even more with your MetaMask wallet. These notifications and chats Snaps offer extended and fun communication features to MetaMask users. 

Depending on the provisions of the Snap installed, MetaMask notification and chat snaps can offer features ranging from simple notifications about developments regarding assets in your wallet to powering real-time conversations.

To experiment with this feature, you can install the desired notification Snap from the Snap Directory and follow the normal installation procedure to add it to your MetaMask.

Closing up, we have explored the three major functionalities of the MetaMask Snaps and have installed some of these Snaps throughout this tutorial. Available Snaps aren’t limited to the ones shown, however, the installation processes are similar. You can follow these steps to get started and refer to resources from the Snaps you’ve installed for more advanced operations. 

Do note that featured snaps aren’t a form of endorsement or recommendation, and is only meant to showcase the capabilities of MetaMask Snaps. 

Final Thoughts

MetaMask, through MetaMask Snaps, is crossing borders. The multiple non-EVM Snaps wallets could mark the end of EVM monotony which MetaMask is known for. It is not certain how well these wallet applications will function alongside the original EVM support on MetaMask, but it looks promising. Meanwhile, extra features like transaction analysis and notification applications will introduce users to a new way of using their wallet application.

While the official Snaps Directory managed by MetaMask is the most reliable source for installing a Snap and current Snaps are audited, it is still recommended that users do their own research before installing or using any Snaps. Always read through the permissions and understand how the application interacts with your wallet and other potential risks before connecting your wallet. Also, note that this article is only for educational purposes and should not be taken as financial advice.

https://www.coingecko.com/learn/sui-blockchain-crypto

What Is Sui?

Sui is a Layer 1 blockchain that utilizes parallel transaction execution to process transactions at a faster speed than other blockchains. It is created by Mysten Labs, a software company that counts key members of Meta’s crypto division among its core members.

Key Takeaways

• Sui is a smart contract Proof of Stake blockchain developed using the Move programming language. The move programming language was originally developed for the proposed Diem blockchain by Meta.

• Sui uses parallel transaction execution, which enables it to execute transactions faster than blockchains that execute transactions sequentially.

• Sui also utilizes other features like asset ownership and distributed computing to improve scalability. 

With over $300 million generated in fundraisers by Mysten Labs, the team behind the Sui blockchain, the smart contract blockchain was already off to quite a remarkable start. These funding programs were backed by major venture capitalists, including Circle, Binance Labs, Lightspeed Venture Partners, a16z, and NCSoft. 

Sui has been hyped as one of the two main spinoff projects from Meta’s abandoned blockchain venture, Diem, with Sui’s co-founders including ex-Meta employees who played major roles in developing the now-defunct Diem blockchain. 

Originally, the idea behind the Diem projects was to develop a platform that offers incredibly fast transaction processing speed for significantly lower fees without sacrificing security, and Sui looks to build on top of this idea by creating a blockchain that offers fluidity and flexibility to adapt to different Web3 use cases – hence its name “Sui”, which means water in Japanese philosophy. 

After nine months of running its incentivized testnet program, the Sui blockchain launched its mainnet in May 2023. 

Now, let’s look at what Sui blockchain is and how it works.

Introduction to Sui

Sui is a smart contract blockchain network built with the Move programming language. It runs the delegated Proof of Stake (DPOS) consensus algorithm and claims to offer super-fast transaction processing speed and a relatively low transaction fee. Sui claims to offer up to 125,000 TPS and about $0.001 fee per transaction.

As a Layer 1 network, Sui is able to run its own consensus system and support dApps, where applications on its network operate without the need to bridge from a parent network. The Sui network supports DeFi, NFT, and utility applications. 

Sui claims that its network maintains the security level seen in major blockchain networks while delivering improvements to processing speed and overall efficiency. These features are powered by the Move programming language, Sui’s parallel transaction algorithm, and the DPOS consensus algorithm. 

How Does the Sui Blockchain Work?

Like the Ethereum network and other similar smart contract blockchains, the Sui blockchain operates a virtual machine. The virtual machine is a software version of a computer processing unit. It is a virtual vending machine that changes the state of the network as instructed by instructions from contract accounts. These instructions are written or translated into a programming language the machine can work with. 

 Major role players in the Sui blockchain include;

The Move Programming Language

The Move programming language was inspired by the Rust programming language. It was developed by the Meta team for the Diem blockchain. It is designed to optimize blockchain safety and security by fixing the key issues of Rust. Move is structured to support the development of safer and quicker applications. It defines asset ownership at a code level, allows smart contracts to inherit security, and enables the Virtual machine to easily translate and execute commands from these contracts.

Move developers claim that the language’s linear execution type is a fix for the reentrancy issue that affects other smart contract languages like Solidity and Vyper. This works by clearing the resources for each function from the execution loop once the virtual machine executes the command. 

Move delivers a faster compilation time due to a lower level of abstraction, and it offers improved security thanks to the liner type execution. Other features like compilation level verifications to reduce bugs in the bytecode, and syntax level interoperability (due to Move’s bytecode transparency) make Move a cutting-edge language for developing smart contracts. 

The DPOS Consensus Algorithm

The DPOS (Delegated Proof of Stake) is a variant of the POS (Proof of Stake) algorithm. The Sui network entrusts the safety of the network to delegated validators. For every epoch, a set of validators is selected to validate new blocks and grow the chain by hashing the new blocks into the chain. Validators stake their assets on the network and stand a chance to get selected based on the amount of assets staked on their node. Validators are awarded a portion of newly generated tokens as a reward for this role. Sui also runs a fee system that compensates validators for infrastructures dedicated to the validation duty. This fee is charged as part of the standard transaction fee.

There are about 100 validators on the Sui network. While many argue that this leaves the network poorly decentralized and prone to 51% attacks, the low validator count also contributes to the network speed as the network is able to reach consensus in a shorter period of time, relative to other networks with higher validator count.

Parallel Transaction Execution

Sui adopts the parallel transaction execution system. This system handles network transactions simultaneously instead of ‘one after the other’ as seen on networks that operate the sequential transaction execution system. Sui claims that this system contributes significantly to its super-fast transaction processing speed.

The parallel execution system routes the Sui network through multiple states simultaneously and delivers a uniform post-execution state. The RPC feeds the network with multiple transactions in defined orders. The network validates these transactions simultaneously across multiple threads. The final validation order may differ, but this doesn’t affect the network’s final state. 

Parallel processing puts every resource on the Sui network to use, contracting multiple CPUs and splitting the processing power of the network to handle a series of requests at the same time. In contrast to sequential transaction execution, parallel processing efficiently uses the network’s resources, leaving no idle or redundant processing power in the network and delivering higher throughput.

Transactions on the Sui network are categorized into simple and complex transactions. Simple transactions are able to bypass the consensus and get executed instantly. Transactions such as regular P2P transfers of owned assets are categorized as Simple.

Complex transactions (like transactions containing shared objects) require the consensus system and are handled differently. The Sui network adopts Bullshark and Narwhal, as part of the network’s consensus system to handle complex transactions. Bullshark arranges the transactions in their orders and allows slower validators to contribute to the consensus. 

However, to ensure that transactions are processed fast, Narwhal runs a bypass for complex transactions. Narwhal is a Byzantine Fault Tolerant (BFT) consensus and DAG mempool. It is the data availability layer of the network’s consensus system and allows the blocks to the hashed even when some of the transactions fail. As a Data Availability (DA) system, Narwhal holds the details of the transactions it ran a bypass for, this ensures that the network is able to retrieve these transactions and run proper validation for them in case.

Key Features of the Sui Network

Sui network is designed to achieve infinite scalability. The Narwhal consensus can be adjusted to allow networks to achieve up to 130,000 TPS. Sui boasts over 10,000TPS and up to 125,000TPS at peak. It maintains that the network could be adjusted to process even more transactions at this rate. However, information from the network explorer suggests a speed of 99TPS at the time of writing – note that the presiding usage condition is an important factor here. In addition to high TPS and rapid finality, here are other key features of the Sui network.

Asset Ownership

Ownership and custody are two subjects defined by blockchain technology. The idea is to ensure that users maintain true custody of the assets they own, such as NFTs and fungible tokens.

Sui handles assets in a relatively different way. Assets on the Sui network are either shared or owned. An owned object (or asset) has just one owner, that is, by being in the custody of an owned object, you maintain sovereignty over the asset. These objects can be freely transferred to anyone on the network without the need for a consensus. Transactions involving owned assets are executed rapidly, relative to shared objects. Shared assets have multiple owners; they operate in a similar manner as assets on other blockchains. To transact with a shared object, the consensus system must validate the transaction.

During the process of asset creation, the creator defines this property before completing the creation process. The asset ownership system not only contributes to the effectiveness of the transaction handling process but also makes it possible for developers to create varying asset types to suit their applications. 

Distributed Computing

The blockchain is a distributed ledger system. The network is controlled by multiple points and different users. Sui adopts this design but claims to feature an improvement that allows it to achieve a higher level of scalability, where its distributed computing feature is meant to scale the network by beefing up resources in case of increased demand. 

This design allows the network to expand to the level of the demand it experiences at that moment. Sui developers claim that this allows the network to function more like a cloud service than a typical blockchain network. As the demand on the SuiI network increases, network validators are able to add more processing power. This keeps the network stable, maintains the gas fees to prevent cases of gas fees blowing out of normal levels, and therefore keeps the entry barrier low, regardless of the network’s state. 

The distributed computing feature is handy, particularly for developers of high-demand applications like decentralized games, NFT projects, or decentralized social media applications. Applications like these can adopt a subscription model with some resistance to rising gas prices.

 Low Gas Fees

Sui hopes to lower the barrier to participation in a decentralized system by offering low fees to the network’s users. However, this can only be achieved if the network is able to maintain a balance between validator charges, extra infrastructures, and the goal of keeping the fees low. At the time of writing, the average fee charged per transaction on the Sui network is about 0.003SUI (3,000,000 MIST) or just below $0.0015 at the current price. To keep the network fee low and prevent significant fluctuations in transaction fees, the Sui network determines the reference charge for transaction validation from the price submissions by validators of the current epoch.

The reference charge is multiplied by the required computation units for each transaction and adjusted for extra charges to obtain the fee for each transaction. Simple transactions on the network are therefore likely to attract a lower fee compared to complex transactions.

Sui Tokenomics

SUI is the native currency of the Sui network. MIST is the lower denomination, where 1SUI = 1,000,000,000 MIST. The SUI token fosters the network and its ecosystem. Fees for transactions are paid in SUI. The SUI token fuels the network’s consensus as well. As a POS-based network, validators stake the SUI token on their node as part of their commitment to protecting the network. SUI holders can also benefit from the system by staking their SUI tokens to their preferred validators’ nodes.

SUI operates a DAO; SUI holders contribute to the project’s governance by voting on proposals on the project’s governance portal. Applications on the Sui ecosystem also utilize the SUI token as their reference token on the platform and grow the token’s value by integrating it into their applications.

The supply of SUI tokens is capped at 10,000,000 (ten billion). Based on the breakdown, 50% of the total supply is allocated to the community reserve. The Sui team claims that this reservation will be utilized for delegation programs, grant programs, research and development, and validator subsidies. 14% of the total supply has been allocated to investors while early contributors received 20% of the total supply as support for interacting with the network in the testing phases. 

At launch, the SUI token was listed on top-tier exchanges including Coinbase, Binance, and Kucoin. It still trades on these exchanges at the time of writing. SUI can also be purchased on decentralized exchanges in the project’s ecosystem. See active SUI trading pairs.

Final Thoughts

Blockchain technology is progressing from heavy and relatively slow networks to sleek and super-fast networks. While there are certain trade-offs, contemporary cryptocurrency applications and their users require highly efficient and cost-saving networks capable of handling periods of extreme usage. With the parallel approach to transaction execution and the DPOS consensus algorithm, the Sui network attempts to deliver these features without completely losing its grip on security and decentralization.

Sui claims to bring a lot of desirable features to the table, an impressive transaction processing speed, and cheap fees. But the claims on security might even be the most significant, considering the growing need for attack-proof applications. 

It will also attempt to utilize the linear type system and modular asset ownership algorithm powered by the Move programming language to deliver a platform where developers can deploy decentralized solutions with assurance of platform-level security. As the project’s ecosystem continues to grow, we will learn more about how these solutions perform in practice. It is, however, normal to see some fluctuations in performance, especially in applications deployed to the network. Ensure to do your own research before engaging in any investments and note that this article is only for educational purposes and not financial advice. 

https://www.coingecko.com/learn/how-to-set-up-ton-wallet-crypto

Getting a TON Wallet

To start using the TON network, you’ll need a TON wallet. Options include @wallet, which can be used within Telegram, and Tonkeeper, a non-custodial cryptocurrency wallet. 

Key Takeaways

• The Open Network (TON), previously known as Telegram Open Network, is a Layer 1 blockchain originally developed by the popular messaging application – Telegram, but is now managed by the community, who formed the TON Foundation. 

• Telegram has endorsed the TON network as its preferred blockchain for Web3 infrastructure.

• TON wallets interface with the TON blockchain to allow holders to manage their assets and interact with decentralized applications on the network.

The Open Network (TON) is a Layer 1 blockchain that is focused on achieving cross-chain interoperability, while operating in a highly scalable secure framework. The TON blockchain is a Proof of Stake blockchain that implements sharding expansion, hence enabling its scalability by distributing the transaction load across multiple Shardchains. 

TON was originally developed by Telegram, but due to legal disputes with the US Securities and Exchange Commission, the messaging app withdrew from the TON project in May 2020 and was subsequently picked up by the community, which formed the TON Foundation. 

More recently, TON has begun working with Telegram to integrate and promote a TON-based Web3 ecosystem, where sending crypto will become as easy as sending a message. The TON @wallet, a Web3 wallet on Telegram, is also launching the self-custodial version, TON Space.

“We believe users have the right to own their identities and assets. With TON Space, users now have the technology to make that convenient.”

– John Hyman, Telegram’s Chief Investment Officer

In the meantime, while we wait for the rollout of TON Space in November, let’s look at how to get started creating a wallet to explore TON through Telegram. 

What Are TON Wallets?

TON, like any other blockchain network, is a distributed ledger with every record validated and stored accordingly with proper identification. User accounts hold records of transactions related to them. Wallets create an interface to allow users to access their assets on the decentralized ledger. TON wallets are either specifically designed or supportive applications that interface with the TON network and mediate between the user and the network in such a way that allows them to perform activities and also allow the network to obtain and execute commands.

TON wallets are gateways to the TON blockchain. To use the platform, a TON wallet is required. Here’s how you can set up a personal TON @wallet;

Setting Up a TON Wallet on Telegram

TON’s @wallet lets you integrate a crypto payment system into your Telegram account. Do note that at the moment, users don’t hold access to their private keys, and @wallet uses custodial storage and is not a self-custody wallet.

Here’s how you can set up @wallet for your Telegram

1. Visit the TON wallet page and select @wallet from the options.

2. @wallet launches a Telegram bot where you can set up and manage your wallet. Approve the permission prompt to open your Telegram and head over to Telegram to complete the setup.

3. On Telegram, click Start to commence the set-up process. Accept permission to add @wallet as a menu option.  Now your @wallet is ready for use on Telegram.

Adding @wallet as a menu option lets you access the wallet in chats. Hover or click the attachment on your chat interface to go to your @wallet.

4. To top up your @wallet, click Deposit crypto from another wallet from the wallet menu, select the asset you wish to deposit, and copy the provided address. Send the specified asset to the address. @wallet supports Toncoin, Bitcoin, and ERC20 USDT.

5. You can also top up your @wallet directly from your bank via the on-ramp payment option as seen above. 

From the list of Ways to add funds, select Top up using a bank card and proceed to purchase the desired asset via credit card.

Now that your wallet is set up and funded, let us take a look at what you can do with your wallet directly from your messaging application.

What You Can Do With @Wallet

@wallet offers a range of interactions, including on-ramps, trading, and more. 

In-Chat Tips and Rewards

The @wallet’s availability offers some fun use cases and tipping is one of them. Discord tipping bots are fun, now the same can be done on Telegram using @wallet. You can tip the friend that just sent you a perfect meme. Simply hover over the attachment, go to your wallet, click send, and enter someone’s Telegram user name to send them some crypto! Group admins can also run reward programs over the messaging application through @wallet, where contest rewards can be easily and instantly distributed through @wallet.

Routine Payment

Financial transactions that you can run over @wallet aren’t limited to tipping and reward distribution. You can also make payments from your @wallet. @wallet claims to simplify routine payments by allowing users to send cryptocurrencies to Telegram usernames. Instead of the long chain of address, you can make payments to supported merchants through their Telegram handle.

On-Ramp Crypto Purchase

On-ramp crypto facilities allow you to purchase cryptocurrencies directly from your bank. @wallet offers direct bank-to-wallet crypto purchases. @wallet’s on-ramp facility accepts over 30 fiat currencies including the Euro and the US dollar.

Crypto Trading

On @wallet is an integrated P2P trading platform. On the platform, users are able to create and manage trading offers. You can create a sale or buy offer for your desired cryptocurrency or fiat. The P2P trading platform collates and displays the ads, where interested peers may decide to take your offer and redeem the assets.

Apart from @wallet, you can interact with the TON network through a number of other wallet applications. The Tonkeeper wallet is one of these. Here’s how you can set up and use the Tonkeeper wallet.

How to Set Up Your Tonkeeper Wallet

Tonkeeper can not be integrated into Telegram but allows users to execute extended activities on the TON network. Tonkeeper claims to be self-custody and presents a wider range of uses for the TON network. Reported features include staking services and connection to decentralized applications. Tonkeeper also lets users hold custody of their wallet keys.

The Tonkeeper wallet is available for Android OS and iOS. Chrome and Firefox extensions are also available for desktop devices.

Now, let’s look at how to set up your Tonkeeper Wallet

1. Visit the TON wallet page, select Tonkeeper, and proceed to install the version for your device.

2. Launch and set up your wallet. Ensure to write down and safely store your passphrase and choose a password for your wallet. Your created wallet is now ready for use.

3. You can now send and receive TON and other supported assets through your Tonkeeper wallet.

Other Wallets That Support TON

Apart from Tonkeeper and @wallet, a couple of other wallets also support the TON network. Here are some other wallets you can connect to the TON network with.

Trust Wallet

Trust Wallet is multi-chain and is built with support for different cryptocurrency networks. Trust Wallet’s support spreads from payment solution blockchains to enterprise-level smart contract blockchains, and it is confirmed to be supporting over 40 chains, including TON. Trust Wallet also provides a gateway to decentralized applications through an in-built browser and the WalletConnect feature. Trust Wallet is available for mobile devices and also as a desktop extension. 

The TON network is pre-integrated into Trust Wallet. To add the TON network to your wallet, tap the menu icon on the top right corner of your wallet. Scroll or search “TON” in the search bar. Toggle the switch icon to make TON available in your wallet. You can now send and receive TON in your Trust wallet. However, Trust Wallet hasn’t developed support for TON dApps at the time of writing, and TON smart contract tokens aren’t also supported. Only send TON to your Trust Wallet until official support for other currencies are announced.

SafePal

SafePal is available as a browser extension, an application for mobile devices, and a hardware wallet. The Safepal hardware wallet costs about $50 and can be used alongside the desktop browser extension and the mobile wallet. Safepal is a multi-chain and multi-asset wallet with support for over 20 blockchain networks, including Bitcoin, Ethereum, and BNB Smart Chain. SafePal’s wallets also support NFTs. SafePal wallet users can trade their assets from the comfort of their wallets through the SafePal mini-trading feature. Staking programs are also available, so you can put your crypto to work while holding. 

SafePal supports TON and is one of the first wallets to provide support for TON in hardware wallets. To use TON on SafePal, tap on the kebab menu by the left side of your wallet and select Manage Coins. On the next page, search “TON” in the search bar. Click the add icon to add TON to your wallet. You can now transact on the TON network from your SafePal wallet. SafePal also offers support for TON dApps. You can connect to applications on the TON network from the SafePal dApp feature on mobile and desktop extensions. 

Coin98 Wallet

Coin98 is available as a mobile wallet and browser extension for desktop devices. It is a multi-chain and multi-asset wallet with support for over 26 blockchain networks, one of which is the TON network. A reported excess of 400,000 cryptocurrency investors in over 150 countries uses Coin98 for their cryptocurrency transactions. Users can store their crypto assets in the wallet and use the in-wallet exchange feature to swap their assets across supported chains. 

Coin98 wallets also enable connection to other decentralized applications. Coin98 also presents user incentives through the X-point reward program. The reward program awards points to users for performing certain activities using the wallet. X-points can be redeemed for gifts in the Coin98 store. X-points are also earned for referring new users.

TON network is automatically available on Coin98 wallets. However, you can activate and reactivate by clicking Manage from the Homepage options. Select Manage All Wallets and toggle icons to activate or deactivate desired wallets.

You can also create a TON wallet. Click the wallet icon from the top right corner of your wallet. Select TON from the options and create a wallet.  You can send and receive TON on your Coin98 wallet.

Final Thoughts

Telegram offers users the ability to send and receive funds over the messaging app through @wallet. This article guides the reader through the process of setting up wallets for use on the TON network, as well as a brief guide on other TON network interactions available over Telegram.

Follow this guide to set up your wallet and apply caution while interacting with the network. Also, note that this article is only for educational purposes and not financial advice.

https://www.coingecko.com/learn/erc-1155-token-standard

What Is the ERC-1155 Multi Token Standard?

The ERC-1155 multi token standard lets developers manage multiple fungible and non-fungible tokens and token standards under one contract. 

Key Takeaways

• ERC token standards are defined features of tokens that run on the Ethereum blockchain.

• ERC-20, ERC-721, and ERC-1155 are some of the most popular ERC token standards, along with ERC-777. ERC-20 and ERC-777 define the operation standard for fungible tokens while ERC-721 is popular amongst NFT creators and collectors.

• ERC-1155 pieces together features of these other standards to develop a flexible token standard that can manage multiple tokens and token standards under one contract.

Most transactions on the blockchain involve token transfers. Tokens are a representation of value on a decentralized network, and can confer varying rights, such as governance and other utilities on a decentralized network. Tokens can be either native to their blockchain (coins) or smart contract tokens.

Native tokens are inherent and their features are defined alongside the blockchain network on which they run. However, the features of smart contract tokens are defined by set guidelines and specifications to ensure they function correctly. Smart contract tokens on the Ethereum blockchain are subject to the ERC token standard. 

Now, let’s take a look at what ERC token standards are.

What Are ERC Token Standards?

ERC (Ethereum Request for Comment) token standards are smart contract standards for tokens running on the Ethereum blockchain. They define the core behavior of tokens issued on the network. Functionalities defined in ERC token standards include fungibility, spend behavior, and possible asset security algorithms. 

ERC standards let developers specify how their tokens communicate with the Ethereum network and with the users as well. Each standard has some predefined logic (like fungibility) for tokens leveraging them and gives developers the freedom to dictate other attributes before the contracts are deployed. ERC standards and their naming conventions are also often adapted by other blockchains, such as BNB Chain’s BEP token standard, and Tron’s TRC token standard. 

Some popular ERC standards are ERC-20, ERC-721, and ERC-1155.

ERC-20 Token Standards

The ERC-20 standard is used to create fungible tokens. This means each token created under the ERC-20 standard is equal to the other and can be used together and interchangeably. They share the same identity and can be sent in bulk. 

For instance, an ERC-20 token contract to mint a million tokens basically issues a million of the same token. Each token can be spent as wished and in the same way. Every token in the contract has equal value; the same metadata, and can be used for the same purpose. ERC-20 tokens can also be broken into pieces and sent in decimals, where creators can specify the decimal limits.

ERC-777 Token Standards

The ERC-777 standard is similar to ERC-20; the only difference is some improvements in token management, like burning and minting, and ERC-777 tokens cannot be split into decimals. ERC-777 introduces the receive hook, allowing contracts to react when they receive a token.

ERC-721 Token Standards

ERC-721 standards are popular amongst NFT creators and NFT collectors. ERC-721 tokens are non-fungible. Each token in a mint is unique and can be ‘decorated’ differently, where ERC-721 token creators define the attributes of each token, which are fixed. Despite being minted under the same contract, each token cannot be spent in place of the other and they cannot be split into pieces in their original form. NFT games also adopt the ERC-721 token standard for unique in-game items.

Now, let’s look at the ERC-1155 token standard, which is a fusion of ERC-20, ERC-721 and ERC-777.

What Is the ERC-1155 Standard?

One of the creators of the ERC-1155 standard was the Enjin team, who were looking to develop a ‘one fits all’ design for smart contract tokens. Its provisions are defined under the EIP-1155 authored by members of the Enjin, Horizon, and Turing teams. ERC-1155 is a hybrid smart contract standard.

ERC-1155 standard allows some flexibility for smart contract tokens and smart contract developers. It allows developers to issue different smart contract tokens and token types under the same contract, with the goal of striking out the need to write a new contract each time a developer wishes to create a new token. This design was drawn out with contemporary blockchain games and applications in view. In situations where gamefi developers wish to mint several non-fungible and fungible game items, writing new contracts for each type and item could be cumbersome. With ERC-1155, the developer can deploy as many tokens as required under the same contract.

ERC-1155 tokens can bear features of any of the fungible and non-fungible token standards. Developers can mint both fungible and non-fungible tokens under the ERC-1155 contract. The ERC-1155 standard also supports semi-fungible tokens (SFTs). SFTs can be interconverted between the fungible and non-fungible standards, where SFTs can be traded as fungible tokens while maintaining unique properties.  

Resource-Efficient Token Management

The Ethereum blockchain manages tons of smart contracts, some of which are related to the same project. This could be multi-token projects (like projects operating separate governance and utility tokens), gamefi projects issuing fungible and non-fungible tokens, and other similar cases. By design, ERC-1155 saves resources for the network by packaging these tokens under the same contract, removing the need to write a new contract for each token.

ERC-1155 enables batch transfer as well. This means that users can send multiple tokens under the same contract at once. Since the same contract is called for the transaction, the gas fee paid is less, relative to sending each token separately. The batch balance feature can also save ample time in cases where users wish to obtain the records of balances for each token under the same contract.

Utility of the ERC-1155 Token Standard

Some of the use cases already in place for the ERC-1155 token standard include:

Open Edition NFTs

Open edition NFTs have no set limits on the number of art pieces (or digital signatures for multimedia) that can be minted by the collectors. Collectors that participate in the minting event can mint as many NFTs as they can afford.

In most cases, the only set limit is the minting period. Throughout the duration of the NFT minting event (say 24 hours from the start of minting), any number of NFTs can be minted. When this set time elapses; the minting event ends and the number of NFTs minted by the collectors becomes the total supply for the collection. The rarity of the collection and its art depends on the number of collectors who participated in the event and the amount of art they minted.

Open edition NFT projects leveraging the ERC-1155 standard can map the artworks minted by the collectors to one contract. ERC-1155 smart contract standard also allows the batch transfer of NFTs and gives the creator the freedom of adding a fungible token to their NFT project under the same contract.

Dynamic NFTs

Through ERC-1155, NFT creators can upgrade or revamp their NFTs after the initial mint. One application of this is dynamic NFTs, which retain their unique identifiers, while their metadata and appearance change according to smart contracts in response to outside data. Smart contracts handles the metadata-changing process, and they are designed to obtain information from oracles and run an automatic change in response to external data.

Music NFTs

Musicians can use the ERC-1155 token standards to distribute their original songs, where multiple copies of the music NFT can be minted and held by multiple people. Musicians can set the number of music NFTs that can be minted, or they can combine the mechanics of open edition NFTs, where collectors can mint as many copies as they wish during a certain period. 

Gaming

NFTs are prevalent in decentralized games; in-game items like weapons and skins can be represented as NFTs with each gamer retaining full custody of their items. The ERC-721 smart contract token standard was first used in the CryptoKitties games and has since this time dominated the NFT space, but they could be limited in functionality due to their rigidity. Likewise, the utility of ERC-20 tokens in games are limited largely to functioning as in-game currency. With only these two token standards, this meant ERC-20 contracts for in-game currency and many ERC-721 contracts for each piece of gaming equipment. 

With ERC-1155, developers can create fungible tokens and multiple ERC-721 tokens under one contract. Not only does this save developers’ resources, it also allows efficient use of fungible and non-fungible tokens within the same smart contract. Gamers can also trade their NFTs in batches, as ERC-1155 supports the batched transfer of assets. 

ERC-1155 vs. ERC-20

The ERC-20 smart contract standard was one of the earliest smart contract token standards on the Ethereum blockchain and arguably the most popular ERC standard. Majority of existing and new projects adopt this standard for issuing and distributing tokens. ERC-20 tokens are fungible, a similar feature it shares with the ERC-777 standard.

In comparison, ERC-1155 supports the creation and management of fungible and non-fungible tokens. However, as mentioned above, the ERC-20 standard is designed for fungible tokens only. Each ERC-20 token lives in a separate contract as the standard doesn’t support multiple contracts. Batched transfers are also not possible with the ERC-20 standard; only tokens with the same ID can be transferred at a time. Meanwhile, ERC-1155 supports the batched transfer of assets, saving cost and time relative to the number of unique assets transferred per batch.

ERC-20 token transactions are final. There are no algorithms to run authentications on transfers and once the transfer request is executed, the action cannot be reversed. This is a bit different for the ERC-1155 standard tokens, thanks to the transfer safety rules. The ERC-1155 safe transfer rule delineates conditions in which a token transfer reverts. The smart contract verifies that the transaction is in agreement with each of the rules to avoid exploitations.

ERC-20 is a relatively simple smart contract standard that defines (fungible) asset issuance and transfer without additional utilities. ERC-1155 improves on the fungible token creation and management system of the ERC-20 standard and adds extra utilities while trimming the complexities of building on the blockchain.

ERC-1155 vs. ERC-721

The ERC-721 standard lets you create unique, non-fungible tokens on the Ethereum blockchain. These tokens cannot be used interchangeably with each other, each token has its own defined characteristics, and can only be sent one at a time. The ERC-1155 standard is also used to create non-fungible tokens but differs from ERC-721 in certain ways.

While ERC-721 only supports the creation of non-fungible tokens, the ERC-1155 standard supports NFTs and fungible tokens. It combines the abilities of ERC-20 and ERC-721 in this case. In addition to offering support for both token types, they can be minted and managed under the same contract. The developer can create tokens to define items in their game and also a native fungible token for the game’s ecosystem. Players can find both token types in the same contract. The ERC-721 standard doesn’t have this feature at the time of writing. Therefore, for every token, the developer needs to write a new contract and users have to manage their assets separately.

In addition, the ERC-1155 standard does not store additional metadata and links smart contracts to multiple URIs, this makes for more flexibility and reduces the cost of development. For the ERC-721 standard, the metadata must be stored in the smart contract, which could consume more resources and reduce flexibility. ERC-721 standard’s support for static metadata alone also means that it could be unable to support developments in the NFT space like dynamic NFTs.

ERC-1155 standard’s batch transfer feature also means that these multiple tokens in the contract can be sent at a time (in a single transfer) and a single fee is paid for the transaction. While batch transfers might attract higher fees, they could still save a significant amount in gas fees and time compared to performing the transactions one after the other. However, batch transactions aren’t available for ERC-721 tokens, requiring each token is sent separately, one at a time.

The transfer safety rule in the ERC-1155 standard offers an extra layer of verification for transfer, protecting users from accidental or erroneous transfers. It also allows reversion in case. This feature as already explained is unique to the ERC-1155 standard and absent in ERC-721 and ERC-20 standard. ERC-1155 could score a significant point over the ERC-721 standard in terms of safety, thanks to this feature.

ERC-1155 standard removes the need to approve individual tokens separately and makes it possible to develop atomic swaps for ERC-1155 tokens. This is not possible with the ERC-721 standard and ERC-721 tokens.

Final Thoughts

The ERC-1155 standard offers a number of token-level improvements for tokens running on the Ethereum blockchain or any other network that employs similar technologies. We have discussed how this works and how it compares to other standards. While the flexible features enjoy the limelight, the additional security features could benefit the everyday blockchain enthusiast even more. A handful of projects are already utilizing the technologies it presents, predominantly NFT projects. Also, as the crypto space develops, projects in other sectors could explore even more applications for the ERC-1155 token standard. 

As always, note that this article is only for educational purposes and no information here should be taken as financial advice. 

https://www.coingecko.com/learn/add-coinbase-base-to-metamask

Add Base to MetaMask

1. Visit Chainlist
2. Search “Base”, and confirm network details (Chain ID: 8453)
3. Click Add to MetaMask and approve the request to add network. 

Key Takeaways

• Base is a Layer 2 rollup network built to scale the Ethereum network, built on the OP Stack. It is backed by the largest listed cryptocurrency exchange – Coinbase.

• The Base mainnet launched on August 9, 2023, and has seen significant usage since this time. A notable contributor to Base’s popularity is the launch of friend.tech, a decentralized social media application on the network.

• In this guide, we take you through the process of downloading and installing a MetaMask wallet, integrating the Base network, and adding native tokens on the network to your MetaMask wallet.

Base is a Layer 2 solution built on Ethereum, and is developed by Coinbase, the largest listed crypto exchange, along with Optimism. Base has a substantial ecosystem, with a mix of DeFi blue-chips like Uniswap, SushiSwap and Beefy, and is also home to friend.tech, the decentralized social network topping the fees and revenue charts. 

Base utilizes Optimism’s OP Stack, and is set up to become part of Optimism’s Superchain vision, where a network of Layer 2s share the same underlying security with a common communication layer. As an optimistic rollup, Base also offers users lower cost and high throughput, as it packages thousands of transactions into a single batch, which is then submitted to Ethereum as a single transaction. 

Base is an EVM network and MetaMask offers a simple way for users to install EVM networks on their wallets and access dApps deployed to the network. MetaMask is an easy-to-use self-custody wallet for EVM networks, providing wallet services to about 10 million cryptocurrency users across different networks.

Now, let’s get started on adding Base to MetaMask – the first step to exploring the Base ecosystem.

Installing the MetaMask Wallet

First, download and install the MetaMask wallet.

Visit MetaMask’s official page and select your device’s operating system and proceed to install. 

For mobile users, the applications can also be downloaded on your device’s application store.

Complete the installation and proceed to add a wallet. Click Get started to proceed.

If you already have a wallet you wish to import, click Import wallet. You will need your security phrase or private key to import existing wallets. Enter the phrase or private key and complete the wallet import process.

To create a new wallet, click Create a wallet. Copy and save your wallet’s security phrase, set up your password, and complete the procedure. Always remember to store your wallet security phrase safely, ideally offline and on crypto steel. 

Now that your wallet has been successfully installed, you can now add the Base network to your wallet.

Add the Base Network Manually

1. From your MetaMask wallet dashboard, click the network dropdown from the top left corner of your wallet. Click Add network.

2. A list of pre-set networks is shown, however it doesn’t include Base; click on Add a network manually to add Base.

3. On the form, enter the network details accordingly

• Network name: Base

• Network URL: https://developer-access-mainnet.base.org

• Chain ID: 8453 

• Currency symbol: ETH 

• Block explorer URL: https://basescan.org

​​​​

4. Click Save to complete.

Base is now available in your MetaMask wallet. You can switch to Base by clicking the network icon from the top left corner of your screen and selecting Base from available networks. You can also install other EVM networks through this procedure, although you’ll need to look for their network details to add them manually. 

Another way to install the Base network is via ChainList.

Add Base to MetaMask Through Chainlist

On Chainlist, you can add available EVM networks with a few clicks. Chainlist collates EVM network details and allows users to add new networks to their wallets without needing to go through the manual process of sourcing and entering network details. To add Base to MetaMask with Chainlist:

1. Visit Chainlist

2. Enter Base in the search bar at the top of the page. As seen in the above network details, 8453 is the Base network’s Chain ID. Click Connect Wallet on the search results with the correct Chain ID.

3. Follow the prompts in your wallet to add the network to your wallet.

After approving the permission to add Base, you have successfully added Base to MetaMask and you can now switch to the Base network.

Add Base to MetaMask With Blockchain Explorers

You can also add Base to MetaMask through blockchain explorers, like Blockscount’s Base Mainnet Explorer and BaseScan. 

1. At the bottom of the page, click the Add Base to MetaMask button with a MetaMask icon. 

2. This opens up a prompt in MetaMask to allow the explorer to add a network. Confirm that the details are correct, and approve the prompt. 

3. You’ve successfully added Base to MetaMask.

Now, let’s proceed to add a native Base network token to your MetaMask wallet.

Adding Custom Base Network Tokens to the MetaMask Wallet

For this guide, we will use GeckoTerminal to obtain the contract address of an actively traded token on the Base network. The Base network also has a handy explorer with a token page that lists the smart contract tokens minted on the platform. Before adding any new tokens, always verify that the smart contract addresses are correct.

1. On your wallet, switch to the Base network.

2. Visit the GeckoTerminal page for Base network pools.

3. Click on the desired pool, scroll to the contract area, and copy the assets contract.

You can search for the asset you wish to copy its contract. For this guide, we will use USDbC, one of the most actively traded assets on the network. USDbc is bridged USDC on the Base network. This token contract can also be obtained from CoinGecko.

4. Return to your wallet, and click Import tokens to add the asset to your wallet.

5. Enter the token’s smart contract address in the provided input box. The asset’s remaining details will populate automatically.

6. Click Add custom token to proceed.

7. Click Import tokens to complete.

USDbC is now available in your wallet. You can now see your balances without using the network’s explorer, and click on the asset to send or receive. You can add more network tokens to your wallet through this procedure.

Final Thoughts

With over 100 million users on Coinbase, Base has the potential to bring non-DeFi natives on chain, and many protocols are looking to Base to grow their user base. By connecting to Base, you’ll be able to explore the variety of protocols available on the network. 

As always, note that this article is only for educational purposes and not financial advice.

https://www.coingecko.com/learn/add-optimism-op-to-metamask

Add Optimism to MetaMask

1. Click “Add network” from the network menu
2. Add Optimism from the list of Popular custom networks
3. Approve adding the network on MetaMask.

Key Takeaways

• In this guide, we give you a visual guide on how you can download the MetaMask wallet, add the Optimism network to your MetaMask wallet, and add custom tokens on the network to your wallet.

• Optimism is a Layer 2 scaling solution for the Ethereum network. As an optimistic rollup, it saves users time and cost by packaging thousands of transactions and submit them as a single transaction to the main blockchain.

• Optimism has taken off since its launch, and users can connect to the network through Web3 wallets like wallets.

The Optimism mainnet launched on May 31, 2022, and has since then become one of the most popular rollups, with over 22% of total TVL across all rollups. Optimism is a Layer 2 network that functions as a separate execution layer on the Ethereum network, primarily handling transactions away from the mainnet. As a Layer 2 network, it enables scalability of the Ethereum chain by improving transaction speed and throughput, while reducing costs.

As an optimistic rollup, Optimism assumes off-chain transactions that take place on its network are valid, and bundles up thousands of transactions before submitting them to the Ethereum mainnet as a single transaction. However, in the event that transactions are not calculated correctly, anyone can challenge the results of an optimistic rollup transaction by computing a fraud proof during the seven day challenge period. Once the challenge period has ended, the rollup block is accepted and confirmed on Ethereum. 

As Optimism is an EVM network, you can connect to the network from your MetaMask or other similar wallets. MetaMask is available for desktop and mobile devices; the web extension is supported by Chrome, Opera, Brave, and Firefox browsers.

Installing the Metamask Wallet

On MetaMask’s page, select your device’s operating system and begin the installation.

For the MetaMask mobile wallet, the applications can also be downloaded on your device’s application store.

Complete the installation and proceed to add a wallet. Click Get started to proceed.

If you already have a wallet you wish to import to, click Import wallet. You will need your security phrase or private key to import existing wallets. Enter the security phrase or private key and complete the wallet import process.

To create a new wallet, click Create a wallet. Copy your wallet’s security phrase, set up your password, and complete the process. Ensure that you’ve stored your wallet’s secret recovery phrase safely, ideally offline and on crypto steel. 

Now that we’ve installed MetaMask and set up a wallet, we can now proceed to add the Optimism mainnet to the wallet. 

Manually Add the Optimism Network to Your MetaMask Wallet

On your MetaMask wallet, click on the network bar on the top left corner of your dashboard.

Select Add network from the pop-up window.

From the list of pre-installed networks on MetaMask, you can add Optimism directly (outlined in black), or proceed to enter details by clicking Add a network manually. 

In the form that pops up, fill in the following details.

• Network name: Optimism

• RPC URL: https://mainnet.optimism.io

• Chain ID: 10

• Currency: ETH

• Explorer: https://optimistic.etherscan.io

Click Save to complete.

You can now switch to the Optimism network when needed. Simply click the network dropdown at the top left corner of your wallet and select Optimism from the list.

Add Optimism to MetaMask Using Chainlist

Another way to add Optimism to your MetaMask is using Chainlist. Chainlist collates network details of EVM-compatible networks, and users can add available networks to their wallets directly through Chainlist. 

To add Optimism Network using Chainlist;

1. Visit Chainlist and connect your MetaMask Wallet.

2. Search ‘Optimism’ in the search bar at the top of the page. Ensure that the network details correspond to the verified Optimism network details.

3. Tap ‘Add to MetaMask’ and follow the prompt from your wallet to add the verified OP Mainnet information automatically to your wallet.

The Optimism mainnet is now available in your wallet; you can switch to the network and explore applications on the network. 

Add Optimism to MetaMask With Optimism Blockchain Explorer

You can also add Optimism to MetaMask through the Optimism blockchain explorer. At the bottom of the page, there is a button to Add OP Mainnet with a MetaMask icon

Clicking this button will open a popup on MetaMask, with a prompt to allow the site to add a network. Click Approve, and Optimism will be added to your list of MetaMask networks. 

Now, let’s add a native Optimism network token to the wallet.

Add Custom Optimism Network Token to MetaMask

For this guide, we will be obtaining a verified contract address for a native Optimism network token from CoinGecko. You can also obtain an asset’s smart contract address from any other platform, like the project’s website. We will be adding the OP token to our Optimism wallet on MetaMask.

1. Visit the OP token profile on CoinGecko and copy the token’s Optimism network contract.

On your wallet, ensure that your wallet is connected to the Optimism network

2. Click Import token to add OP token to your wallet.

3. Enter the token’s smart contract address in the provided input box. The asset’s details will populate automatically.

4. Click Add custom token to proceed

5. Click Import tokens to complete.

The OP token is now available in your wallet. You can now see your balances without using the network’s explorer, and you can click on the asset to send or receive.

You can follow this procedure to add more custom network tokens to your wallet.

Final Thoughts

The Optimism network is the second largest by TVL, with plenty of projects for users to explore, while offering users a cheaper alternative to the main Ethereum network. With more Layer 2s launching using the OP Stack, like Base and opBNB, there is likely to be more interest in Optimism as well. This guide is designed to help you get started on exploring the Optimism network by configuring your wallet. There are multiple ways to add the OP Mainnet to MetaMask, which are covered in this article. In the event you are using a different wallet to interact with the Optimism mainnet, do your own research to ensure that the network details are correct. 

Finally, note that this article is only for educational purposes and not financial advice.  

https://www.coingecko.com/learn/testnet-bnb-tbnb

What Is Testnet BNB (tBNB)?

Testnet BNB is needed to test applications on the BSC testnet before they are deployed on the mainnet. You can claim testnet BNB through official BNB Smart Chain faucets, or through other partner faucets like Quicknode and Coinbase. You can also use testnet BNB to accomplish tasks for the opBNB airdrop. 

Key Takeaways

• BSC testnet tokens can only be used on BSC testnets. Testnets are risk-free testing environments that function similarly to the main network for developers and users to test new applications or network features without the risk of losses. 

• Testnet tokens are meant to have no direct financial value; they are not meant for sale and cannot be used on the main network.

• You can claim testnet BNB through the BNB Smart Chain Faucet, Quicknode BNB Testnet Faucet, Coinbase BNB Faucet, or the official BNB Discord Faucet.  

• You can use tBNB to complete tasks for a share of the opBNB prize pool.

Are you looking to test new BSC applications before they are launched on the mainnet? Testnet tokens are your gateway to testing new upcoming applications. Thanks to incentivized testnet programs like BNB’s opBNB, blockchain enthusiasts are keen on trying out new decentralized applications prior to their launch to win a share of the airdrop. Let’s explore some faucets that offer testnet tokens for the BNB Smart Chain (BSC) test network.

Claim Testnet BNB on the BNB Smart Chain Faucet

The official BSC faucet offers up to 0.1 BNB per claim. Users can also claim other BSC testnet tokens like BTC, ETH, USDC, USDT, and more. To use the official BSC BNB faucet;

Step 1: Visit the official BNB faucet.

Step 2: Complete the CAPTCHA verification to proceed

Step 3: Enter your wallet address in the input box, Click Give me BNB, and select 0.1 BNB.

To receive other testnet tokens, click Peggy Tokens and select the token you wish to receive.

Step 4: Your selected token and the indicated amount will be sent to your wallet.

Claim Testnet BNB on the Quicknode BSC BNB Testnet Faucet

Quicknode offers faucet service for multiple networks, including the BNB Smart Chain and other networks such as Sepolia and Goerli. Note that you must hold at least 0.001 ETH on the Ethereum network to use any of the Quicknode faucets for EVM networks.

To claim testnet tokens from Quicknode;

Step 1: Visit the Quicknode faucet.

Step 2: Connect your wallet to the platform – connecting to the platform autofills your wallet address in the designated input box. You can change this to another address of your choice.

Step 3: Click Select Your Chain and select Binance Smart Chain.

Click Select Your Network, and select BNB testnet.

Step 4: Confirm your wallet address and click Continue to proceed.

You can share a tweet about your claim and receive up to 0.25 or proceed without sharing and receive 0.05 tBNB.

Step 5: Receive testnet BNB

Claim Testnet BNB on the Coinbase BSC BNB Faucet

The Coinbase faucet offers up to 0.25 testnet BNB daily to users. However, you must have a Coinbase wallet. If you wish to use the faucet but have yet to set up a Coinbase wallet, proceed to install the wallet and set up your account to claim.

Step 1: Visit the Coinbase BSC BNB faucet.

Step 2: Click Connect with Coinbase Wallet.

Your wallet address is automatically filled.

Step 3: Click Request BNB to claim 0.25BNB from the faucet.

Claim Testnet BNB on the BNB Discord Faucet

You can also claim some testnet BNB from the official BNB Chain Discord channel. To use this option

Step 1: Join the BNB Chain Discord.

Step 2: Go to the #testnet-faucet2 channel.

Step 3: Enter the following command /faucet {your wallet address}

Step 4: Send to complete, and testnet BNB will be sent to the provided wallet.

What Is the BSC Testnet?

The BNB Smart Chain supports smart contracts and decentralized applications. Smart contracts define how Web3 applications function, and these contracts and the applications they power need to be tested by users and developers before deployment on the BSC mainnet. Likewise, new updates to the BSC network need to undergo testing before they can be deployed on the main network to ensure that the launch goes smoothly. Once a protocol is deployed on the mainnet, it will require the use of real tokens with monetary value, which could result in financial losses from users and developers.

The BSC testnet was developed for conditions like these. The BSC testnet is a playground for users and developers to test out applications without the risk of losing their funds. It functions like the BSC mainnet – like the mainnet, it runs on the Proof-of-Stake consensus mechanism, where project team members play the role of validators. 

However, it features test tokens instead of real tokens with monetary value. As these test tokens can be obtained for free from faucets, developers and users can freely experiment with new applications without worrying about potential losses. 

What Can Testnet BNB (tBNB) Be Used For?

Now that you have claimed some testnet BNB and other BSC testnet tokens, here are what you can use your new ‘assets’ for:

As a developer, you can test out your new applications using the testnet token before and after opening the testing program to the larger public. You can also assist the testers with testnet tokens to facilitate the program. As a validator on the main network, you can also test how new features on the network could affect your node and how to use the new updates as they concern you as a validator.

For users, tBNB functions like BNB. tBNB can be used to test new applications and engage in incentivized testnet programs, where users can run a series of transactions on the application in exchange for rewards, as seen in the below list of additional tasks for the opBNB airdrop. Users can also test new BSC network updates, or to familiarize themselves with the BNB Smart Chain, like sending and receiving crypto assets and adding networks to MetaMask before transacting on the mainnet. 

Using Testnet BNB for the opBNB Airdrop

As part of the opBNB launch, the team has launched a campaign with a $50,000 airdrop. With tBNB, users can complete additional tasks, which include:

1. Depositing tBNB from the BSC testnet to the opBNB testnet

2. Withdrawing tBNB from the opBNB testnet to the BSC testnet

3. Deposit BEP-20 tokens (BUSD, BTCB, ETH, USDT, USDC and DAI) from the BSC testnet to the opBNB testnet — these can be claimed from the official testnet BNB faucet. 

4. Withdraw BEP-20 tokens from the opBNB testnet to the BSC testnet. 

5. Transfer tBNB to addresses on the opBNB testnet.

Adding BSC Testnet to MetaMask

To use the BSC testnet, you will have to add the network to your MetaMask or any other web3 wallet.

We will assume that you already have the MetaMask wallet installed and set up. Otherwise, click here to download and install a wallet for your device.

Add BSC Testnet Manually

Step 1: From your MetaMask wallet dashboard, click the network icon from the top left corner of your wallet. Click Add network.

Step 2: This brings up a list of pre-set networks, but to add the BNB Smart Chain testnet, click on Add a network manually.

Step 3: Enter the network details accordingly on the form that pops up.

• Network Name: BSC Testnet
• New RPC URL: https://data-seed-prebsc-1-s1.binance.org:8545
• ChainID: 97
• Symbol: BNB 
• Block Explorer URL: https://explorer.binance.org/smart-testnet

Step 4: Click Save to complete.

To use the BSC testnet, you can switch to it by clicking the network dropdown from the top left corner of your screen and selecting BSC testnet from available networks.

Adding BSC Testnet via Chainlist 

You can also add the network to your MetaMask via Chainlist. Chainlist collates active EVM testnet and main networks and lets users add their favorite networks in a few clicks. Here’s how you can add the BSC testnet using the platform.

Step1: Visit the Chainlist platform.

Step 2: Connect your wallet to the platform and check the Include Testnets box to feature test networks in your search.

Step 3: Enter ‘BNB smart chain testnet’ in the search bar at the top of the page. As seen above, 97 is the BSC testnet ChainID. Click Add to MetaMask on the search results with the correct ID.

Follow the prompts in your wallet to add the network to your wallet.

You can now switch to the BSC testnet.

Learn how to add BSC to MetaMask and opBNB to MetaMask.

Final Thoughts

We have gone through a few faucets for BSC testnet tokens. There are likely a handful of them we didn’t feature in this article. However, these are enough to get most users started. While using other faucets, ensure that they are legitimate, as foul players target users through fake faucets. Testnet tokens are your ticket to application testing programs; some of these could be incentivized. As a testnet token holder and participant in the testing program, you play a role in ensuring that the official version of applications are devoid of fatal bugs and security issues.

Having said this, it is important to understand that testnet tokens are meant for testing purposes only and are not designed to hold any value. This article doesn’t endorse claiming and hoarding testnet tokens with the aim of benefiting from them financially. Also, note that this article is only for educational purposes and not financial advice. 

https://www.coingecko.com/learn/bridge-to-zksync-era

How to Bridge to zkSync Era

You can bridge assets from supported chains to zkSync Era either through the official zkSync bridge, or use third-party bridges like Orbiter Finance, Rhino.fi, LayerSwap, and more.

Key Takeaways

• Bridges are designed to process asset transfers between networks. They employ technologies such as smart contracts, light nodes, or corresponding swaps via inter-chain liquidity pools.

• zkSync Era is a Layer 2 network that scales the Ethereum network by providing a faster execution layer and publishing proofs of the transactions to the main network using zero knowledge.

• To interact with the zkSync Era network, users will need to bridge assets from Ethereum or other networks. zkSync Era operates an official bridge, although users can opt for other third-party bridging platforms like Orbiter Finance and Layerswap that also support the zkSync Era network.

zkSync Era has seen quite a significant usage since its launch, with GeckoTerminal reporting about $30 million in cumulative daily trading volume on decentralized exchanges that operate on the zkSync Era network. Artemis reports an average of 230,000 daily active addresses on the network and over 800,000 transactions executed daily, even surpassing the Ethereum blockchain in daily transaction count on July 16. 

Like other Layer 2s, zkSync Era scales the Ethereum network by separating the execution and consensus layers. Transactions are executed on the Layer 2 network, while the consensus system on the main network is contracted for the final submission of the transactions. zkSync Era claims to save cost and improve speed by using rollups to package thousands of transactions in a single batch and execute them at once, enabling users to save up to 70% in transaction fee rebates. This is relative to the fee charged on the main (Ethereum) network. At the time of writing, the average transaction fee on zkSync Era is $0.30.

zkSync Era uses zero-knowledge to prove to the mainnet the validity of the transactions in each batch. The zk-proof system is able to establish the integrity of every transaction that takes without revealing the content of the transaction. As zero-knowledge solutions don’t require a fraud-proof system and a 7-days challenge period, the zk rollups are able to achieve finality in a shorter time span than optimistic rollups like Optimism and Arbitrum.

With faster transaction processing time and cheaper fees, along with the potential zkSync airdrop, more users are looking to use zkSync Era. Let’s go through the process of transferring assets between zkSync Era and other networks using bridges. We assume that you have already set up zkSync Era in your wallet. If not, follow this guide to add zkSync Era to your MetaMask Wallet.

Official zkSync Era Bridge

The official bridge supports asset transfer between the Ethereum network and zkSync Era only. Both networks communicate via the bridge using L1-L2 interoperability. Data transfer via the bridge is sent as signed messages and not a transaction on the mainnet. 

The bridge protocol publishes two smart contracts, one on the mainnet and another on zkSync Era. To transfer assets to the zkSync Era from the Ethereum network; the user calls the deposit function, and the sent assets are locked on the Ethereum network. 

The smart contract on Ethereum communicates with the smart contract on zkSync Era to initiate asset minting. An exact amount of the asset locked on the L1 contract is minted on zkSync Era while the smart contract calls a finalizeDeposit method to complete the transfer. The reverse happens for Withdrawals – the asset is burnt on the zkSync Era network while an exact amount is released to the withdrawing address on the main network.

Bridge to zkSync Era From Ethereum

1. Visit the zkSync Era bridge to start the deposit process.

2. Connect your wallet and switch to the Ethereum network

3. Select the asset you wish to bridge and enter the amount you wish to bridge.

4. Your connected address is automatically filled as the receiving address. You can change this by clicking the wallet area and changing your wallet address. When doing so, make sure the address is correct and is supported by the zkSync Era network to prevent loss of funds. 

5. Click Continue to proceed. Evaluate the transaction on the next page and click Send to zkSync Era to complete

Withdraw to Ethereum

1. Navigate to the Withdraw section and connect your wallet.

2. Switch to zkSync Era Mainnet from your wallet.

3. Enter the details of your wallet as described above and click Continue to proceed.

4. Click Send to Ethereum Mainnet to complete.

Apart from the official bridge, you can also use the following platforms to bridge assets to zkSync Era.

Bridge to zkSync Era With Rhino.fi

Rhino.fi is a self-custody platform that lets users switch between chains without complex bridges or network switches. It claims to support over 500 crypto assets across 6 major chains and has transacted over $1.5 billion worth of assets. 

By design, Rhino Finance is built on StarkEx Validium Layer 2  technology. It utilizes smart contract technology in a fashion similar to that described for the official zkSync Era bridge. Smart contracts deployed on the target chain and StarkEx works in synergy to retain and release funds on supported networks as required by users. The platform is governed by a DAO that votes on improvement proposals using DVF, the project’s native governance token which also doubles as a reward token for users of the platform.

1. Visit the Rhino.fi platform and click Launch App.

2. Click Connect wallet. Select your wallet provider, and connect to the platform.

3. Follow the prompt to link your wallet to the platform and enable trading by signing both messages from your wallet.

4. Proceed to deposit funds to your Rhino.fi account. Click Deposit.

5. Set the asset you wish to deposit and the network you are depositing from.

6. Click Deposit and approve the transaction from your wallet

Now that your funds have been successfully deposited, you can now bridge your funds to zkSync Era.

1. Click the Bridge icon from the menu in the left of your screen.

2. Enter the details of the assets you want to bridge. Select the asset and amount you wish to bridge, set the direction and click Review Bridge to evaluate the transfer and complete the process.

Bridge to zkSync Era With Orbiter Finance

Orbiter is a multi-asset, multi-rollup bridge for Layer 2 rollup networks. It supports asset transfer between Ethereum and rollup networks like Linea, Arbitrum, Optimism, and zkSync Era.

Major role players in Orbiter Bridge’s technology are a Maker, the Sender, and a set of smart contracts. How it works: a Maker deposits and locks funds on the target (or destination) network, the Sender sends funds to the Maker on the source network, and the Maker proceeds to transfer an exact amount to the sender on the target network. 

This process is controlled by three smart contracts. The Maker Deposits Contract (MDC) oversees the custody of the Maker’s locked assets and the transfer of funds to the sender. The Event Binding Contract (EBC) defines and controls these rules while the Simple Payment Verification (SPV) contract stores the proof of transactions on Orbiter. In this way, Orbiter hopes to support cheap and fast cross-rollup transactions.

1. Visit the Orbiter Bridge application

2. Connect your wallet and proceed to set the asset and amount you wish to bridge and the direction of your transaction.

3. Click Send and proceed to approve the transaction from your wallet

Bridge to zkSync Era Wtih LayerSwap

LayerSwap provides a facility for multi-directional asset transfer. The platform can be used to process transfers from centralized exchanges to blockchain networks and also for bridging assets between blockchain networks. Supported networks include Ethereum, Arbitrum, zkSync Era, zkSync Lite, and several other networks. Official documents claim that the platform supports a total of 20 blockchain networks and 17 centralized exchanges at the time of writing. On-ramp services are also available on the platform.dxsfdxse

1. Visit the LayerSwap platform

2. Click Launch App to access the bridging application

3. Click the wallet icon, select your wallet provider from the options, and connect your wallet to the platform.

4. Set the direction of your transfer and enter the amount you wish to bridge.

5. Enter your wallet address in the provided box. The application autofills the connected wallet address. You can change this and enter the wallet address you wish to send the asset to on the destination network.

6. Click Swap now to proceed

7. Choose how you’d like to complete the swap.

For manual payment, a deposit address is provided to you. Copy the address and transfer the exact amount you wish to bridge to the address. To pay directly from your connected wallet, select Via wallet and click Send from wallet. Approve the request from your wallet to complete the bridging process.

Bridge to zkSync Era With Bungee Exchange

Bungee is a bridge aggregator. Like DEX aggregators, it is not a bridge itself. It pools data from supported bridges and presents users with available options and the best route for their bridging process. 

The Bungee exchange is powered by Socket. As described by the project, Socket is an interoperability protocol for secure and efficient data and asset transfer across chains. It is able to perform asset transfers without converting the assets to intermediate forms like hTokens. Socket operates a liquidity layer and a data layer. The liquidity layer utilizes liquidity across bridges and routes funds through them as selected by the users. Users are informed of the changes and processing time of each bridge. The data layer publishes details and proofs of transactions to the target chains.

1. Visit Bungee Exchange

2. Connect your wallet

3. Select the asset you wish to transfer and the direction. Enter the amount you wish to bridge. Bungee will recommend a Bridge Route for the transaction. Click Review Route to verify these details and move on to the next step.

5. Review the route and complete the bridging process. If you are satisfied with the conditions, click Bridge and approve the transaction from your wallet and wait for the funds to arrive at your destination network. You can also click Change to see what other bridging options are available.

Final Thoughts

Bridges are of significant utility, especially in cases like this where they are the gateway to enjoying a relatively improved experience. You can bridge your assets to the reportedly faster and cheaper zkSync Era, explore decentralized applications at cheaper fees and higher throughput, and move your assets back to the main network. This article guides you through using the official bridge developed by zkSync Era and a handful of other third-party bridges that support the network.

However, considering the security risks of using bridging platforms, it is recommended that you use reputable bridges and apply caution while interacting with any of them. Also, note that the above content is only meant as a guide and should not be considered financial advice.

https://www.coingecko.com/learn/how-to-use-friend-tech

How to Get Started With Friend.tech

You’ll need a mobile phone, a Twitter (X) account, a friend.tech invite code and at least 0.01 ETH to fund your friend.tech account.

Key Takeaways

• Friend.tech is a decentralized social media application on the Base network. Users own personalized shares and purchase other users’ shares to be able to interact with the shareowners.

• Friend.tech also has a dedicated airdrop tab where points are allocated weekly on Friday. These points are expected to translate to tokens for friend.tech governance. 

Cryptocurrency enthusiasts are raving about friend.tech, the new social media application on the Base network. Over 111,000 users have bought account shares on the application and moved over 45,000 ETH while creating accounts and trading user shares on the platform based on data from Dune Analytics.

You can also track friend.tech shares on Coingecko.

Friend.tech tokenizes user influence and attention and lets other users purchase rights to a creator’s attention. Creators and influential individuals can utilize the application to connect to their audience, where shareholders enjoy privileges like being able to enter private chatrooms with the creator or user.. It also presents them an opportunity to monetize their influence, where user shares (known as keys on the platform) are tradable. These key prices are based on supply and demand, with the keys currently going for up to 2.65 ETH for Racer, one of friend.tech’s founders. 

At time of writing, the application is still in its beta testing phase, and new users will need to obtain an invite code to be able to access the application.

Ready to try the application? Follow this guide to get started,

Download the Application

Friend.tech is a PWA (Progressive Web Application), which can be installed in your device like a native mobile application. However, PWAs aren’t limited to specific operating systems as they are enabled by the web browser.

To download friend.tech:

1. Visit Friend.tech on your mobile device

2. Click on the menu on the top right corner of your browser and select Install app. Allow the download to complete.

You can now access the platform by tapping on the friend.tech icon from your application list.  

Create a Friend.tech Account

Now that you’ve downloaded the application, it’s time to create your account.

Step 1: Create an Account 

Click Sign in to start your account creation process. In the next screen, enter your mobile number or use your Google or Apple account to sign up.

Step 2: Find a Friend.tech Invite Code

Friend.tech is an invite-only application at the moment, so you’ll need an invite code in order to use the application. You can obtain an invite code from friends who are already using the application. You can also look out for users sharing access codes on Twitter or other social media channels. 

Once you obtain an access code, enter the access code in the provided box and click Proceed.

Step 3: Link Your Twitter

Friend.tech requires you to connect to your Twitter account. You will need to authorize the application to access your Twitter profile in order to user friend.tech.

Step 4: Fund Your Friend.tech Account

There are two ways to fund your account: you can either deposit ETH directly into your friend.tech wallet through the Ethereum mainnet, or send ETH to the provided address on the Base network. In the case of the latter, ensure that you are sending via the Base network or your funds might get lost. Do note that the minimum deposit is 0.01 ETH.

When this is done, you can now start trading shares on the platform. 

How To Trade Keys On Friend.tech

Now that your account is funded, it’s time to buy your first shares! 

You can also purchase other users’ keys on the platform. If you have a specific Twitter (X) account you’d like to connect with, you can search for their username under the Explore tab. Under the Explore tab you’ll also be able to see the top users, as well as who’s trending at the moment. 

Once you purchase a user’s shares, you can message them from your Chats tab.

Friend.tech Airdrop

Under the friend.tech Airdrop tab, users can see how many points they’ve earned over the course of the week. Points are allocated based on the user’s activites on the platform, and are calculated on a weekly basis.

We just did our first Friday Points Airdrop to 44k users.

Some reminders:
– 100M points will be distributed during the six month beta period
– Airdrops happen on Fridays
– Points are recorded off-chain
– Points will have a special purpose once the beta period ends

— friend.tech (@friendtech) August 18, 2023

The current sentiment is that these points will likely translate to a future token, as the Series A round came with token warrants.

Friend tech raised a Series A recently for a $50m valuation.

The Series A round came with token warrants so there will definitely be a token coming out.

Paradigm was their only seed round investor, so it’s in their benefit to tease an airdrop because:

Tease airdrop ->
Farm…

— Derivatives Monke (@Derivatives_Ape) August 20, 2023

To accumulate points, users can trade creators to build up their aggregate transaction volume. It’s also likely that the more popular an account is, the more points the creator will earn. As an example, Cobie, who’s one of the top five accounts on friend.tech at time of writing, earned 1.1million points in the first drop.

Do note that airdrops are highly speculative and following the above steps is not guaranteed to result in earning tokens. 

Final Thoughts

Friend.tech holds many promises, and a significant number of cryptocurrency enthusiasts are exploring these opportunities. If you are looking to get started, this guide takes you through the basic procedures. It is, however, not exhaustive of the operations on the platform. As the platform develops, new features are likely to be added. Ensure that you understand how these features work and how they apply to users. This article is only educational and not financial advice. 

https://www.coingecko.com/learn/friend-tech-social-app-base

What Is Friend.tech?

Friend.tech is a decentralized social app built on Base that allows creators to connect to their audience through tokenized attenion, where a creator’s influence is represented by keys that can be traded for access to private chatrooms and other perks. 

Key Takeaways

• Friend.tech launched on the Base network on August 10, 2023, and promises new opportunities for creators and their audience to connect.

• Friend.tech allows creators to connect to their audience in a more personalized way and also monetize their influence. This is done through introducing a tokenized attention scenario where a creator’s influence is represented in keys (previously known as shares).

• Friend.tech is built on the blockchain and leverages smart contracts and cryptocurrency to commoditize social reach.

Coinbase’s Layer 2 network, Base, has seen a spike in usage over the past few weeks. Artemis reports an all-time high in the number of daily active addresses and daily transactions on the platform on August 10, 2023, where over 127,000 wallets sent an excess of 630,000 requests to the network during this time.

August 10 2023 was also the launch date of friend.tech, which is becoming one of the top dApps on Base, topping the charts in revenue and fees generated.  As reported by Dune analytics, friend.tech has recorded over 85,000 buyers (or users) since its launch on August 10, 2023.

Source: Dune

The application, which is still in its beta phase, has seen over 38,000 ETH moved in daily trading by users. In terms of trading activity, the platform eclipsed OpenSea during this time. In fact, based on DefiLlama data, friend.tech is currently topping the charts for 7 day revenue, outstripping established DeFi protocols like MakerDAO and Lido. 

Source: DefiLlama

CoinGecko now tracks friend.tech user shares. Click here to view.

Now, let’s look at what exactly friend.tech is.

What Is Friend.tech?

Friend.tech is a compact web3 social media application that claims to connect creators to their audience in a gamified manner. Friend.tech’s operations range from tokenization to seamless interaction that leverages blockchain technology and cryptocurrencies. On the surface, it is a social media application, but its mechanisms are driven by decentralized networks and crypto assets.

Friend.tech turns its users’ influence into tokens. Users gain rights to a friend’s attention or influence by buying their platform tokens, which are known as keys (previously known as shares). The key price is guided by supply and demand conditions.

Meanwhile, creators have the freedom to experiment with ways to enhance their influence and attract new shareholders. In essence, it lets creators build a community and monetize their influence. For the audience, it offers access to their favorite creators where shareholders enjoy privileges such as private conversations with the creator in chat rooms. 

Since its launch, a handful of notable cryptocurrency influencers have joined the platform, including Hsaka Trades and Jordan Fish (Cobie). Beyond crypto influencers, NBA players and esports personalities have also signed up

Who Are the Founders of Friend.tech?

Friend.tech is founded by a two person team: 0xracerAlt and Shrimp.

Previously, Racer was involved with TweetDAO, a project that focused on running a Twitter account like a DAO, where only holders of the Tweet DAO Egg NFT collection would receive access to the account. 

Racer then teamed up with Shrimp to create Stealcam, where single images can be uploaded to the site, which then becomes an NFT, but unlike conventional NFTs, users can’t see it unless they steal it, with the price going up every time the piece is stolen.  

How Friend.tech Works

Friend.tech operates a PWA (Progressive Web Application), where users can manage their friend.tech profile from a browser-enabled mobile application. The PWA application features a non-custodial personal wallet, where users hold the private keys to their friend.tech wallets and can export their account’s wallet to other wallet applications.

Once a user completes their account creation and funds their wallets, Keys are created on their accounts, which other users can purchase to gain access to the account creator. Every user account on Friend.tech has keys; however, the value of the account’s keys is tied to the owner’s influence and how much these are sought after. 

On friend.tech, users can interact with creators whose keys they own over chats, or explore popular creators. To date, over 38,500 ETH worth of creators’ Keys has been traded on the platform so far.

The usage statistics from the first few weeks of launch make a clear statement; friend.tech has successfully caused a buzz, and Crypto Twitter is excited about it. Now, let’s look at why friend.tech is so popular.

Why Is Friend.tech So Popular? 

Friend.tech isn’t the only decentralized social media application. Its ability to turn the attention economy into a game is one of the reasons why it has drawn so many users to itself. Cryptocurrency enthusiasts love tokenization, especially when there is the opportunity to earn. In addition to this, it’s up to the influencers to decide what they share in their private chatrooms, so the type of access these tokens (keys) grant can be extensively personalized. 

Every user controls their keys and directly benefits from their key’s growth. In this way, friend.tech appeals to influencers, as it offers them a new monetization stream. As more popular personalities are jumping on the bandwagon, they are also carrying their followers along for the ride. After all, friend.tech presents opportunities to followers to interact with their favorite creators, as they can buy their way into a conversation with their idols. 

Beyond the social aspect, friend.tech also has an airdrop tab, which opens up a point system. Points are airdropped on Fridays, and according to the app, these points will have future uses in friend.tech. This attracts airdrop hunters, who are looking to claim their place as early adopters and stand a chance of benefiting from any planned rewards in the future. Speculations around the earndropped tokens being used in the project’s governance have also stirred engagement even more.

Another factor is the hype around the Base network. Being a newly launched Layer 2 network that is associated with Coinbase, which has over 100 million users, the network’s popularity is on the rise. Some of this influence trickles down to projects launched in its ecosystem. In a developing event, Paradigm, an investment firm connected to Coinbase, announced that they are investing in the friend.tech project. This has increased investors’ and users’ conviction about the project. 

Friend.tech Privacy Concerns

The Block shared an article citing a leaked database of Friend.tech users’ profiles linked with their Ethereum addresses. While this has been confirmed to be misleading, as seen in this tweet from the project, it gives an idea of how friend.tech could make it easier to doxx users based on the link between their Twitter profiles and wallet address.

This is just someone scraping our public API that shows the association between public wallet addresses and public Twitter usernames.

It’s like saying someone hacked you by looking at your public Twitter feed.

Irresponsible reporting from @TheBlock_ and @vishal4c https://t.co/GIXOWazqBk

— friend.tech (@friendtech) August 21, 2023

Using the base network explorer, it is possible to trace user accounts on the platform to their wallet addresses while they transact on friend.tech, which users are aware of. Users are also required to provide a phone number during the account creation or signup using their Google or Apple accounts. 

At time of writing, we are not sure about how the application uses and preserves personal data, as clicking on privacy policy on friend.tech’s home page opens up a “Coming soon!” notification. Users are advised to protect their personal information while using the platform – possible ways to do this is by signing up with an alternative email and using a new wallet address when moving funds to and from the platform.

Final Thoughts

Tokenization and true ownership are some of the most important features of cryptocurrency and blockchain technology, respectively. Friend.tech attempts to tokenize influence and attention in a rather interesting way. It will probably strive to oust centralized creator economies like Onlyfans while deploying its technology on the Base network. Building on the Base network could give it some advantage due to the high throughput the Base network claims to possess. It will be interesting to witness its evolution and that of similar applications that could emerge in the future. Even more interesting will be how decentralized social platforms perform against centralized alternatives.

As creators and their fans explore the platform, it is recommended that they understand the potential privacy concerns as outlined above. Also, note that this article is only for educational purposes and not financial advice.

https://www.coingecko.com/learn/add-opbnb-to-metamask

Add opBNB to MetaMask

1. Connect your MetaMask wallet to the opBNB Bridge

2. Click on Withdraw

3. Follow the prompt to approve adding opBNB to MetaMask

You can also add opBNB to MetaMask by manually entering the RPC details.

Key Takeaways

• In this guide, we take you through the process of connecting your wallet to the opBNB network and also how to add and manage smart contract tokens on the network.

• opBNB is BNB Chain’s Layer 2 scaling solution. It uses optimistic rollups to confirm transactions in batches and save time and cost for users of the network.

• The BNB Chain team introduced the opBNB network to further improve the network’s ability to withstand high usage from dApps like decentralized games.

On August 16, 2023, BNB Chain (BSC) announced that the opBNB mainnet has opened up for infrastructure providers, hinting at a wider opening for the public later the same month. opBNB is powered by Optimism’s OP Stack. The OP Stack is an open-source modular optimistic rollup framework that can be modified to meet the requirements of diverse ecosystems.

With opBNB, the BNB Chain pursues improved user experience by developing an external execution layer that employs Layer 2 scaling solutions like rollups to achieve higher throughput and cheaper transactions. According to the team, opBNB is optimized for high-demand decentralized applications like games and money markets. With the mainnet now live, users and developers will explore the network and hope to benefit from the improved user experience the network promises.

Trying out the network for the first time? opBNB is an EVM-compatible network and can be integrated into the MetaMask wallet for seamless use.

MetaMask is a fully constituted cryptocurrency wallet with support for Ethereum blockchain, EVM-compatible Layer 2 networks, and standalone EVM blockchains like BNB. It lets you install and access any EVM network by entering the relevant network details. 

The MetaMask wallet comes in browser extensions and applications that can be installed on mobile devices. Depending on your device, the procedure might be a little different.

Here’s how you can install the MetaMask application on your device and add the opBNB network to your wallet.

Installing Metamask on Desktop Devices

First, download the MetaMask extension for your web browser.

Visit the MetaMask website to download the extension. MetaMask extension works on Chrome, Microsoft Edge, Brave, Opera, and Firefox browsers.

Install the extension for your browser and proceed to set up your account.

Set Up Your Wallet

MetaMask allows you to create a new wallet or import your old MetaMask accounts or existing accounts from other wallets. To import your old wallets, you’ll need your wallet’s private key or seed phrase.

To import your old wallet using your seed phrase, open the MetaMask wallet and select Import wallet, and proceed to enter your recovery phrase in the form that pops up. Set up your wallet password and complete the process by clicking Import.

For new users, you can create a new wallet by clicking Create a wallet. Set up your password and click Create.

Review the security information carefully and proceed to copy your wallet’s security phrase. Preferably, write down this phrase and store it safely offline. Your wallet is now ready for use.

Importing Existing Wallets Using Private Keys

Open the wallet (with an account already added). 

Click on the account dropdown in the centre of your screen, select Import account and enter your private key in the form. 

Click Import to complete. Your old wallet will be added to your existing MetaMask account.

How to Add opBNB to Metamask Manually

To access the opBNB network, you will need to add the network to your MetaMask in order to connect your MetaMask wallet to web3 dApps. To manually add the network:

Step 1: Add Network

Log into your MetaMask, click on the network bar in the top left corner, and select Add network from the drop-down.

Note that opBNB is not yet available for selection in the list of pre-integrated networks on MetaMask.

Step 2: Add Network Manually

Click Add a network manually at the bottom of the page.

Step 3: Enter opBNB Network Details

In the form that pops up, fill in the following details in their respective boxes

• Network Name: opBNB Mainnet

• RPC URL: https://opBNB-mainnet-rpc.bnbchain.org

• ChainID: 204

• Symbol: BNB

• Explorer: http://mainnet.opBNBscan.com/

Click Save to complete.

The opBNB mainnet network can now be accessed via your MetaMask wallet. Simply click the drop-down menu at the top left corner of your wallet and select opBNB mainnet from the menu.

Add opBNB to Metamask Through the opBNB Bridge

You can also add the network to your MetaMask through the opBNB bridge. 

Step 1: Connect Your Wallet 

Visit the opBNB bridge and connect your wallet. Switch to the BNB Chain network; your wallet will prompt you to switch if you are not already connected to BSC.

Step 2: Click on Withdraw

Navigate to the Withdraw section.

Click Switch to opBNB Mainnet and follow the prompt in your wallet to add the network.

Add Custom opBNB Mainnet Tokens to Your Wallet

Now that you have set up your wallet to use the opBNB network, let’s proceed to add some smart contract tokens to the wallet.

Step 1: Obtaining the Token’s Contract

At the time of writing, the opBNB chain is newly launched and wBNB is the only official token on the network and the network’s explorer is yet to stabilize. Therefore, for this guide, we will use GeckoTerminal to track opBNB and obtain the smart contract address of WBNB.

Visit the opBNB page on GeckoTerminal and click on any WBNB pair.

Scroll down to the smart contract section and copy the WBNB contract. This process is the same for any other smart contract token you wish to add.

Step 2: Add the Token to Your Wallet

Go to your MetaMask wallet home page and scroll down to the bottom of the asset list. Click Import tokens and proceed to enter the asset’s details in the form that pops up.

Paste the contract address for the WBNB token  in the designated input box; other details will load automatically.

At time of writing, WBNB shows up as WETH – while this will probably be fixed soon, you can click Edit to change the name to WBNB. We will proceed to add without editing to differentiate from the natively added WBNB.

You can also opt enter these details manually.

Click Add custom token to add the token to your MetaMask wallet.

To complete, click Import token.

Step 3: Proceed to Transact WBNB From Your MetaMask

Your balances for the added token can be seen in your MetaMask wallet. You can also send and receive the asset as usual. Note that these transactions take place on the Layer 2 network.

To use your token on the mainnet, you will need to bridge them via the opBNB Bridge. Ensure that you have enough BNB on your source wallet to pay for the bridging fee.

Final Thoughts

Getting hands-on with new solutions like opBNB is important as the space tilts towards newer and more effective networks. opBNB promises an improved experience for users and the BSC network as a whole. Ensure to verify every detail and install the network properly before transferring assets and connecting them to external platforms.

This guide is specific to the MetaMask wallet. Note that these controls could differ for other wallet applications. In any case, ensure to read the proper guide before using the application, and confirm that all details are correct before sending funds. Also, be wary of the signed smart contracts and how they interact with your wallet. As a standard, always do your own research before interacting with smart contracts and investing in any cryptocurrency.

https://www.coingecko.com/learn/what-is-opbnb-layer-2

What Is opBNB?

opBNB is a Layer 2 scaling solution for the BNB Chain. It is built on the OP Stack, and will offer users faster and cheaper transactions through optimistic rollups.

Key Takeaways

• opBNB is an optimistic rollup network built to scale BSC. It is meant to take the bulk of the workload away from the mainnet and enable the whole network to perform better against increased demand. It uses a sequencer for transactions and a Batcher to package them into batches.

• opBNB network attempts to achieve high throughput without sacrificing security by contracting the main network (BSC) for the final validation of transactions performed on its execution layer. A verifier is used to ensure the integrity of these transactions.

• opBNB mainnet has launched after spending over a month in the testing phase, with the network will be gradually opened to the general public.

A majority of Layer 2 scaling solutions operate on the Ethereum network, but, opBNB will attempt to scale a different network – The BNB Smart Chain (BSC). 

The opBNB mainnet went live on August 16, 2023.

Today, opBNB mainnet opens up to Infrastructure providers 🙌

Read our Path to Mainnet blog to find out more as we get one step closer to the public opBNB mainnet launch.

Below, we’ve included several links for getting started!https://t.co/K2XHAU4NrH

— BNB Chain (@BNBCHAIN) August 16, 2023

The initial launch is open to infrastructure providers first, and the network is expected to be open to general access later in the month. The mainnet launch comes after one and half months of testing, during which the network reportedly handled over 7 million transactions from over 435,000 unique wallets.

What is the BNB Smart Chain (BSC)?

BSC is an EVM-compatible Layer 1 network. BSC was created at the height of the Ethereum network’s scalability woes, presenting users with an alternative from the congested Ethereum network by developing a network compatible with the Ethereum network. 

BSC separates the execution and consensus layers of the Ethereum network and attempts to develop a more agile network by building a more energy-efficient consensus layer to work with the adopted execution layer. The BSC network used the Proof of Stake (PoS) consensus algorithm, while the Ethereum network was still using the Proof of Work (PoW) consensus algorithm at that point in time. Ethereum would eventually transform into a PoS network following the Merge. 

The difference in the consensus system and a few other modifications made BSC significantly faster than the Ethereum blockchain. By operating a virtual machine similar to Ethereum’s virtual machine and smart contract language, BSC supports applications built using the Ethereum network’s infrastructures. 

Developers on Ethereum can build new applications or deploy their existing applications to the BNB Smart Chain without learning a new language or making any major changes to the application’s codebase. BSC is a sovereign network but can communicate with Ethereum and other compatible networks like Fantom and Polygon via independent bridges.

Source: Artemis

BSC has seen quite a good level of adoption; according to data from Artemis, it records a consistently higher amount of transactions daily when compared to Polygon, Fantom, and Ethereum. A daily average of 1.2 million active addresses makes it one of the most active blockchain networks.

To further scale the BSC network, opBNB was developed.

opBNB: Optimistic Layer 2 Rollup for BSC

With opBNB launching its mainnet, it promises developers and users an improved experience compared to what is obtainable on the BSC network, particularly when it comes to large scale Web3 applications that demand high transaction volumes and intensive daily active users. This overload results in high gas fees and lowered network responsiveness, leading to the need for a Layer 2 to improve throughput. According to the team, BNB is designed for over 4,000TPS and transactions on opBNB could cost as little as $0.0005, based on the testnet.

BSC developed the opBNB network not only to augment the main network but to function as a standalone execution environment. This means applications can launch on opBNB and not deploy on the mainnet at all. Likewise, applications on BSC can deploy on the L2 network, along with other applications that were previously deployed on EVM compatible L1 and L2 networks. Also, because the main network oversees the final validation of transactions on opBNB, opBNB is as secure as BSC.

opBNB was developed using the OP Stack, which is a modular optimistic rollup framework that can be used to develop scaling solutions for different blockchain networks. The OP Stack is a set of pre-developed components, just like a SD Kit which can be used by teams looking to build a rollup solution.

Characteristics of opBNB

Here are some features of the opBNB network:

Scalability

Layer 1 blockchains like BSC and Ethereum handle all the core functions of blockchain operations (execution, consensus, settlement, data availability) at the network level. This means that there is a risk of network congestion during peak periods or spike in traffic, which results in high transaction fees, slow transactions, and poor user experience. 

Layer 2 networks are an execution layer built on top of the main network to enable scalability, offering users lower fees and faster transactions. In the case of opBNB, it utilizes optimistic rollups, where transactions that take place on opBNB are rolled up into a single transaction before being submitted to BNB.

Interoperability

As opBNB is built on the OP Stack, it is interoperable with other Layer 2 platforms that utilize the OP Stack, such as Optimism and potentially Base. Moreover, opBNB’s EVM compatibility and support for Solidity helps to create an open and collaborative system across other OP chains, driving innovation.

While it’s not clear whether opBNB will be part of the Optimism Superchain, the fact that it’s built on top of the BNB Chain instead of Ethereum sets it apart from many of the other OP chains. 

Secured by the BNB Chain

The BNB Chain is a Proof of Stake network, where validators commit their assets to the network and screen new blocks for possible issues, keeping BSC safe. opBNB taps on this security infrastructure to secure its network, by publishing proof of every transaction executed on its network to the main network. 

The main network, through data availability layers, is able to obtain information on the integrity of these transactions at any time. Validators on BSC will screen these data and hash them into the BSC chain if they are devoid of inconsistencies. To successfully overrun the opBNB network, an attacker must also be able to overrun the security system on the BSC network.

These features are enabled by opBNB’s design. Now, how exactly does the network work?

How Does opBNB Work?

opBNB is an optimistic rollup network designed with the OP Stack. It inherits the extra features of the OP stack in addition to what can be achieved with optimistic rollups. According to official sources, opBNB does not have a fault-proof system at time of writing, where a contract is used to validate the accuracy of challenges. This section will focus on what is currently obtainable in opBNB’s architecture.

By virtue of leveraging the OP Stack, opBNB has innate modularity. Being a modular network, operations on the opBNB network function independently, but sync with each other to form a dynamic system. opBNB separates the data availability (DA) layer from the execution layer, where separating the DA layer also enables the selection of different DA options and switching between DA schemes based on the situation.  

Optimistic Rollups

Using the optimistic Rollup technology, opBNB arranges transactions executed on its execution layer into batches and sends them for approval on the main network. According to a publication by Ethereum founder – Vitalik Buterin, rollups can package up to ten thousand transactions, prepare and send them on for a one-off validation on the main network. The rollup setup uses pre-state and post-state execution roots to verify changes in the network’s state before and after dispatching a transaction batch. A sequencer is used to arrange blocks in the correct order of reception.

Optimistic rollups are a ‘trust system’, in the sense that they are not designed with a built-in system to ascertain the validity of the rolled-up transaction.  This means that optimistic rollups publish the transactions ‘as-is’ to the main network, with the assumption that they contain no malicious block or transaction. It believes in the integrity of the blocks and transactions the batches contain. This way, optimistic rollups are able to achieve faster transaction processing time than zero-knowledge rollups.

However, optimistic rollups have a longer withdrawal period due to having a challenge period of up to seven days. During this challenge period, anyone can challenge the results of a rollup transaction by computing a fraud proof, and if the challenge is successful, the transaction will be re-executed, maintaining the network’s integrity.

Data Availability

As the Layer 1 (BSC) may periodically query the Layer 2 (opBNB) for data on rolled-up transactions, data availability ensures that anyone can easily access and verify transaction data. Moreover, as opBNB is part of the BNB ecosystem, it leverages BNB greenfield, a blockchain and storage platform, to act as a DA layer, further bringing down the cost of transactions. 

Final Thoughts

Blockchain networks are evolving in capacity. The usage frequency and purpose for decentralized networks have changed considerably from what they used to be a few years ago. Multiple decentralized applications being used by thousands of people to send hundreds of requests to the blockchain network per minute is the norm today, and this is likely to increase in the near future. Layer 2 solutions are currently the most advanced scaling solutions and while they are bound to get even better in the future, the chances of very different approaches to network scaling could also emerge. But this is generally positive for blockchain technology.

BNB Chain has acclaimed relative efficiency; with the opBNB mainnet now launched, it hopes to improve on this. Even though opBNB functions very similarly with other Layer 2 solutions powered by optimistic rollups, scaling a different network could give it a unique advantage in the space. 

Having said this, it will be exciting to see how the new development improves the BSC network. It is also recommended that users apply caution (and financial risk management strategies where due) while using new platforms, as performance could be volatile in the early stages. Also, note that this article is only meant to educate readers on the opBNB network and should not be considered financial advice.