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As far as the investing landscape is concerned, the term ‘generative AI’ is shaping up to be the buzzword of the year for 2023. But with the prospect of a recession to end the year growing, could the boom prove to be resilient enough in the face of severe economic headwinds? generative AI With August bringing the news that major Chinese investment firm Zhongrong Trust missed payments to corporate investors, some market commentators feared a in 2008, which became a catalyst for the global financial crisis of that year. repeat of the infamous Lehman Brothers collapse Despite a difficult 2022 for Wall Street, the first half of 2023 brought cautious optimism back to the markets as the emergence of generative AI, buoyed by the resounding success of ChatGPT, inspired investors to buy into what appears to be a brand-new frontier for tech. The generative AI boom brought with it throughout tech-facing markets. The S&P climbed over 19% between March and July 2023, while the Nasdaq 100 grew by around 33% in the first half of the year alone. impressive rallies But with high inflation rates and the continued interest rate hikes from the Federal Reserve in a bid to control it, fears are growing that a recession in the coming months is inevitable. “Given that markets have risen sharply in recent months, this could trigger a sell-off in the S&P 500 and markets in general if recession expectations materialize, as investor positioning in stocks has increased amid growing expectations of Fed policy easing and AI developments,” warns Maxim Manturov, head of investment research at . Freedom Finance Europe “In the absence of preemptive Fed easing, it is logical to expect more challenging macroeconomic conditions for stocks should a recession occur.” Generative AI’s First Major Test Should a recession emerge, it will undoubtedly represent the biggest challenge that has faced since its impressive emergence. generative AI Today, commentators are split in terms of expectations for generative AI’s market impact. While Matt Bartolini, head of SPDR Americas research at State Street Global Advisors, acknowledges that there’s a lot of potential in AI, investors will need to choose their investments wisely to ensure sustainable returns. “The stocks we talk about with the AI craze are all going to be tech-related, and these large-cap companies are the ones infusing AI and a lot of their capabilities. AI is a very nebulous topic; a lot of people just want to think of it as ChatGPT, but it can also refer to the predictive text on your iPhone,” . Bartolini explains “If you’re looking to get into the , it’s really easy to get the theme call right but the stock call wrong. You buy a semiconductor stock because you think it’s gonna be a home run, but maybe the firm has an accounting issue. On average, stocks underperform by more than the sector average.” AI industry While it’s reasonable to expect that a recession could flush out weaker generative AI stocks by exposing their frailties, veteran trader Joe Terranova believes that it’s naive to assume that such a promising emerging technology will be vulnerable to the impact of a recession. "If the bulls are going to be defeated, you have to tell me how is it exactly you're going to break the fever that currently exists in mega-cap equities? Because every day it's saving the tape," in a recent CNBC interview. Terranova claimed "The script is in place. I've said I think Q3 could be a flat to negative quarter, but on the other side of that, you have the mega-cap put that's in place, and that's going to lead markets to resume the overall positive trend of 2023." Although it’s fair to assume that future economic downturns will bring periods of volatility for generative AI stocks, it’s also important to understand the transformative potential of generative AI. According to a recent Goldman Sachs report, generative AI could raise the within a decade–representing around a $7 trillion increase. annual global GDP by 7% With this in mind, there’s certainly room for investors to take on generative AI stocks as portfolio options; however, the most success may come in the form of long-term plays. Finding Long-Term Value in Generative AI The potential of generative AI is unignorable. It’s for this reason that investors are best off viewing their investments in the industry as long-term plays as opposed to recession-proof stock options. Given that the industry is still very much in its fledgling stages, it makes sense to look to more blue chip generative AI stocks rather than emerging companies that are yet to find their place in a market that’s likely to become more competitive over time. Many leading blue chip tech stocks exposed to generative AI today have proven in the past that they’re capable of overcoming recessions to ultimately reach new high levels of market capitalization, and these represent the best options for investors ahead of what may be a volatile period for the stock market. These stocks include: 1. NVIDIA (NASDAQ: NVDA) History shows us that Nvidia has not only gone from strength to strength in the wake of the 2008 financial crash, but the firm has performed exceptionally well already off the back of the generative AI boom. So far in 2023, Nvidia’s stock has grown more than 200%, and with the chipmaker’s rapid , it seems like a strong option for investors seeking to buy into a reliable firm to show in the face of a wider market downturn. adoption of more generative AI technology some long-term resilience 2. Microsoft (NASDAQ: MSFT) Not only is Microsoft one of the world’s largest tech companies, but it also has an impressive stake in the generative AI landscape. Having invested heavily in ChatGPT's parent company, OpenAI, Microsoft has big plans for the technology to ultimately challenge Google in the field of internet search and office productivity tools. Microsoft also recently introduced its ‘Copilot’ AI feature at a as a statement of intent. For investors seeking to invest in a strong and sustainable generative AI stock, there are few firms better positioned on Wall Street than Microsoft. cost of $30 per month 3. Amazon (NASDAQ: AMZN) It seems likely that Amazon’s Web Services (AWS) will grow to become a key player in the field of generative AI. While the stock performed exceptionally well in recovering from 2008’s financial crisis, the firm is yet to fully recover its value from the tech stock sell-offs of 2022. However, in across AI services, AI platforms, AI frameworks, and AI infrastructure, it appears certain that the company has identified generative AI as a focal point in the development of future innovations. adopting a number of business tools While there are no guarantees of success when it comes to recessions, these blue chip stocks have shown their resilience in the past and are among the leading adopters of generative AI. When headwinds strengthen, blue chip stocks are a solid investment option. With many of Wall Street’s biggest players seeking to ride the generative AI boom, they may prove to be the most resilient places to invest should a recession emerge.

Is the Generative AI Boom Strong Enough to Stand Strong in the Face of a Recession?

জেনারেটিভ এআই বুম কি মন্দার মুখে শক্ত হয়ে দাঁড়ানোর জন্য যথেষ্ট?

Ist der Boom der generativen KI stark genug, um einer Rezession standzuhalten?

¿Es el auge de la IA generativa lo suficientemente fuerte como para mantenerse firme frente a una recesión?

Le boom de l’IA générative est-il suffisamment fort pour tenir bon face à une récession ?

क्या जनरेटिव एआई बूम इतना मजबूत है कि मंदी के दौर में भी मजबूती से खड़ा रह सके?

生成型 AI ブームは不況に直面しても十分に強いのでしょうか?

생성적 AI 붐은 불황에도 불구하고 굳건히 설 수 있을 만큼 강력합니까?

O boom generativo da IA é forte o suficiente para permanecer forte diante de uma recessão?

Üretken Yapay Zeka Patlaması Durgunluk Karşısında Güçlü Durabilecek Kadar Güçlü mü?

Sự bùng nổ AI sáng tạo có đủ mạnh để đứng vững khi đối mặt với suy thoái kinh tế không?

面对经济衰退，生成式人工智能的繁荣是否足以屹立不倒？

Hi Carlos, welcome to our series “Behind the Startup.” Please tell us about yourself and the story behind Olyseum? Ishan Pandey: When Kevin Mitnick, Iniesta, Puyol, De La Peña, and I came together to launch Olyseum, we wanted to create the ‘Coliseum’ of fan engagement. A living, breathing ecosystem where fans from every corner of the planet could join and connect with their favorite stars in new and profound ways. We also wanted to be at the cutting edge of technology and consumer trends by leveraging blockchain technology and the crypto movement to satiate the growing demand among legions of fans worldwide to get closer to their idols. That has always been our guiding principle. Additionally, part of our ethos has been to create a network where value is shared among the participants based on their activity within the platform, which helps us scale. This is a microcosm of how fans should be rewarded for their crucial role in the celebrity economy. Carlos Grenoir: How do NFTs disrupt the fan and community-level engagement? Further, what values does it create for the users? Ishan Pandey: The NFT space is enabling stars to develop high-value digital representations of their content and to share this content with their fans. Across the global social media landscape, fans have massive visibility over their favorite stars’ activities, but engagement levels are quite limited. NFTs empower fans to have their fandom validated, but the current purview of NFTs can be expanded greatly, with innovations in Virtual Reality opening the door for new forms of experiential engagement between fans and stars and for brands to advertise their products in dynamic new ways. Unique NFT experiential collectibles also represent a democratization of celebrity promotions, broadening access to stars’ reach. Carlos Grenoir: Various musicians and actors are eyeing and getting into NFTs to create a more loyal and engaging brand. How can stars monetize their engagement with users? Ishan Pandey: I feel there is a huge opportunity for stars seeking to take their brand monetization capabilities to the next level through NFTs. As we’ve seen, the fan-star experiential paradigm hasn’t been properly explored yet and experiential NFTs, or ‘xNFTs’ as we call them, will redefine the contours of fan engagement and facilitate authentic fan-star interactions that are in high demand. This means stars can truly monetize their star power, their presence, and their connection with fans. Carlos Grenoir: What are your views on regulations around NFTs? Do NFTs need to be regulated as of now, or would that stifle growth in the industry? Ishan Pandey: With crypto in general, there has always been a risk of overregulation and under regulation. During the infancy stages of the crypto space, the lack of coherent regulatory frameworks proved to be a strength and a weakness for the industry, it enabled boundless innovation, but at the same time, it allowed certain nefarious actors to take advantage of the landscape. In my view, a flexible, principles-based approach to regulation that champions innovation while providing best-practice guidelines will help sustain the growth of the space in the years to come and encourage wider industry adoption as NFTs become a centerpiece to enterprise promotional activities. Carlos Grenoir: Chinese authorities have recently announced that they will be moving towards stricter cryptocurrency regulations which promptly led to falling bitcoin prices. How will Chinese regulations affect the market as a whole? Ishan Pandey: Sudden regulatory shifts have a demonstrated history of impacting market sentiment, both positively and negatively. Certain cohorts of traders will be downbeat about the perceived ‘cracking down on crypto, while some institutional investors will see regulatory advances as a positive step for broader industry adoption. It’s difficult to predict a future market response to evolving Chinese regulatory constraints, but irrespective of short term fluctuations, the blockchain and crypto space continues to gather pace and attract interest from the highest levels of industry and Government. Carlos Grenoir: What are your views on Digital Yuan? Is it going to change the world order? Ishan Pandey: It’s certainly a major signal of intent. As of today, the Digital Yuan is accessible to around 10 million people as part of a ‘trial’ phase. This move could, in fact, encourage Central Banks across the world to expedite their own digital currency strategies or start considering Bitcoin as a legal form of tender, as we’ve seen in El Salvador, or could probably happen soon in Paraguay or Venezuela. Carlos Grenoir: Elon Musk has been a driving force behind the emergence of cryptocurrencies such as Bitcoin and Dogecoin, yet his tweets have frequently had a detrimental impact on the market. What is your take on Elon Musk’s Twitter domination? Ishan Pandey: No one individual should be able to steer market sentiment based on a tweet. He clearly believes in the fundamentals of decentralized finance and the opportunities within the space as a catalyst for addressing antiquated financial models, legacy infrastructure, and charting a new path forward with fintech innovations. Carlos Grenoir: 2021 has already witnessed a major crypto boom and its subsequent collapse, all within the first half of the year. What new developments in the crypto industry do you think are in store for the latter half of 2021? Ishan Pandey: Again, it’s difficult to predict what’s coming next, but I anticipate broad adoption of NFTs in the months ahead, particularly as the business case for including experiential NFTs in promotional budgets is better understood. We ourselves want to drive NFTs forward with the upcoming launch of our Olyverse. Developments around a proposed Bitcoin ETF will also be worth keeping an eye on, as well as any changes from a regulatory perspective. We could also see further exploration around Bitcoin as legal tender across nation-states. I also sense there will be a proliferation in the number of social and community tokens, which will introduce large swathes of users in the crypto sphere. Carlos Grenoir: Disclaimer: The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence by asking the right questions and equipping readers with better opinions to make informed decisions. The material does not constitute any investment, financial, or legal advice. Please do your research before investing in any digital assets or tokens, etc. The writer does not have any vested interest in the company. Ishan Pandey.

The NFT Space is Enabling Celebrities to Develop High-Value Digital Representations of their Content

DoshFX, the disruptive straightforward crypto exchange, is shaking up the South African financial landscape and spearheading a movement toward financial inclusion and empowerment. With a mission to provide accessible digital asset solutions, is set to transform the lives of the unbanked, emerging, and marginalized communities across the nation. DoshFX has long grappled with financial exclusion, stemming from a history of segregation and limited access to formal financial services. Despite significant progress, a considerable number of South Africans remain unbanked, hindering economic opportunities and perpetuating inequality. Recognizing this pressing need, , the visionary founder, and CEO of eZaga Holdings joined forces with Jeetu Kataria, renowned global fintech and blockchain evangelist, and the CEO of , a leading global multi-asset trading platform, to launch DoshFX, a truly South African-centric digital assets exchange. South Africa Saud Ally Digital Financial Exchange-DIFX have gained remarkable traction in Africa, and South Africa stands at the forefront of this growing trend. With over 1.5 million cryptocurrency users, South Africa boasts the highest number of digital asset enthusiasts on the continent. The adoption of digital assets is driven by factors such as increased internet accessibility, a thriving mobile phone market, and the rising popularity of cryptocurrencies in the region. The recent faced by the South African Rand due to the ongoing gloomy outlook of economic data, worsening load shedding, and political environment have also showcased the imminent need for the availability and accessibility of alternative assets. Digital assets volatility This is why, DoshFX's emergence is a response to the growing demand for secure and regulated digital asset exchange systems needed in an environment where so many unregulated and questionable characters operate. Understanding the importance of both financial security and regulatory compliance, eZaga and Digital Financial Exchange-DIFX have collaborated to create a user-friendly, reliable, and secure platform that combines the best of traditional banking security with the revolutionary spirit of cryptocurrencies. "We are dedicated to bringing straightforward crypto solutions right to the doorsteps of those who need it most," says Saud Ally, founder and CEO of eZaga Holdings. "DoshFX is not just a crypto exchange; it is a catalyst for change and advancement, enabling South Africans to chart their financial destinies." The launch of DoshFX marks a significant milestone in the quest for financial inclusivity. By leveraging the power of digital assets, DoshFX empowers South Africans to store value, make secure international payments, and overcome the limitations imposed by traditional financial institutions. Adding on to the mission of financial inclusivity, one of the core values of DoshFX is education. The platform is committed to providing comprehensive education to the South African community, particularly those who can benefit the most from alternative financial systems. By equipping the unbanked, marginalized, yet highly eager-to-learn members of society with knowledge about cryptocurrencies and digital assets, DoshFX aims to foster economic empowerment and financial freedom for individuals, families, and communities. As DoshFX sets its sights on reshaping the financial landscape, South Africans can now embrace the world of digital assets with confidence and most importantly through a regulated entity. To learn more about DoshFX and join the movement toward financial empowerment, visit **www.doshfx.io About DoshFX: DoshFX is a first-of-its-kind regulated authorized Financial Services Provider offering crypto services in South Africa. With a mission to make cryptocurrencies easily accessible for all, through its fast, secure, and legal crypto exchange services. DoshFX is an authorized Juristic representative of eZaga FX an authorized financial services provider. FSP No. 44133. Investing in cryptocurrency may result in a loss of capital as the value may fluctuate. Ts&Cs apply This story was distributed as a release by Zexprwire under HackerNoon’s Brand As An Author Program. Learn more about the program here: https://business.hackernoon.com/brand-as-author To start your straightforward journey into digital asset investments, download the app now from the Android, iOS, or Google Play Store, or visit us at doshfx.io. Also published . here

Digital Assets for Financial Inclusion: DoshFX's Revolution in South Africa

Activos digitales para la inclusión financiera: la revolución de DoshFX en Sudáfrica

Actifs numériques pour l'inclusion financière : la révolution de DoshFX en Afrique du Sud

वित्तीय समावेशन के लिए डिजिटल संपत्तियां: दक्षिण अफ्रीका में DoshFX की क्रांति

金融包摂のためのデジタル資産: 南アフリカにおける DoshFX の革命

Ativos digitais para inclusão financeira: a revolução da DoshFX na África do Sul

Tài sản kỹ thuật số cho tài chính toàn diện: Cuộc cách mạng của DoshFX ở Nam Phi

普惠金融的数字资产：DoshFX 在南非的革命

The fast-paced world of crypto is witnessing a new narrative emerging after the revolutionary concepts of , , or . NFTs DeFi Metaverse (RWA), physical assets tokenized and transferred on-chain, are becoming the missing link that unlocks the true potential of DeFi, bridging the gap between digital and physical assets. Real-World Assets RWAs offer a transformative vision for DeFi by providing a sustainable and reliable source of yield backed by traditional assets such as real estate, precious metals, commodities, and art. Tokenizing these assets and incorporating them into the DeFi ecosystem empowers investors with access to a broad range of investment opportunities and diversification previously limited to TradFi. The integration of RWAs marks a paradigm shift in DeFi that fosters liquidity, capital efficiency, and opens doors to new investment possibilities. Pioneering platforms like (MPL), (GFI), (RIO), (CFG), and (BST) are leading the path in the integration of Real-World Assets (RWA) within DeFi. Maple Finance Goldfinch Realio Centrifuge Blocksquare These platforms are revolutionizing the financial landscape by tokenizing real-world assets and unlocking their potential within the decentralized ecosystem. Among the various sectors where RWAs can make a significant impact, there is one sector, that stands out as an ideal use case for RWAs - . the energy sector With its vast physical energy assets, such as electric energy itself, renewable energy projects, or carbon-neutral bitcoin mining, the energy sector offers immense opportunities to tokenize and trade assets on the blockchain. RWAs in this sector could help DeFi to gain access to a trillion-dollar market whilst shaping the future of finance. I. The Rise of RWAs: Unlocking Tangible Value In the dynamic world of (DeFi), (RWAs) are transforming the digital landscape by introducing tangible value. decentralized finance Real-World Assets RWAs encompass a range of assets, including real estate, securities, commodities, and energy resources, tokenized to bridge the physical-digital divide. By tokenizing real-world assets, RWAs offer enhanced liquidity, fractional ownership, and diversified investment opportunities previously confined to traditional finance. This convergence between traditional finance and DeFi fosters compatibility, increased liquidity, and capital efficiency. Among the various sectors ripe for RWAs, shines as an ideal use case. With vast physical energy assets like power plants and renewable energy projects, the sector presents immense opportunities to tokenize and trade energy assets on the blockchain. the energy sector Integrating the energy sector into RWAs grants DeFi access to a trillion-dollar market, propelling the narrative of RWAs as a significant trend in crypto. RWAs represent a paradigm shift in finance, infusing tangible value into the decentralized ecosystem. Through increased liquidity, reduced costs, and improved transparency, RWAs revolutionize investment, trading, and market participation. The integration of traditional finance and DeFi via RWAs sets the stage for a future where finance is redefined by the seamless blending of physical and digital realms. II. Exploring Sector-Specific RWAs: Promising Real-World Asset Projects: Various sectors are leveraging Real-World Assets (RWAs) to unlock tangible value within the decentralized finance (DeFi) ecosystem. Let's explore some notable RWA projects and their contributions to specific industries: : Collateralizing RWAs worth over $680 million to back their DAI stablecoin, MakerDAO has partnered with Monetalis Group, Huntingdon Valley Bank, and Societe Generale, pioneering the incorporation of RWAs in the credit aspect of DeFi. MakerDAO : As an on-chain ecosystem for structured credit, Centrifuge has financed $298 million in total assets, integrating $220 million of RWAs on MakerDAO. Their decentralized application (dApp) called Tinlake enables asset originators to tokenize real-world assets as NFTs, offering lenders attractive investment opportunities. Centrifuge : With over $100 million in active loan value, Goldfinch focuses on lending to real-world businesses, particularly those in emerging markets. By providing junior and senior tranches for assets, Goldfinch offers attractive yields and creates lending pools for borrowers and investors. Goldfinch : A decentralized credit marketplace that connects vetted institutions, utilizing a staking oracle to determine interest rates. Their platform facilitates secure and transparent lending between trusted parties. Clearpool : Maple has issued nearly $2 billion in total loans, expanding beyond traditional credit to receivables financing, US treasuries, and insurance refinancing. By providing institutional borrowers access to DeFi loans, Maple Finance bridges the gap between traditional finance and DeFi. Maple Finance : Energy Web is a prominent organization in the blockchain sector, focused on advancing sustainable energy solutions. They drive innovation and collaboration to enable the integration of renewable energy sources, foster decarbonization efforts, and promote the transition to a cleaner and more sustainable energy future. Energy Web They revolutionize the blockchain industry with Green Proofs, a transparent certification system that incentivizes eco-friendly miners and promotes sustainable energy sources for mining Bitcoin. These projects exemplify the successful integration of RWAs into the DeFi landscape, catering to various sectors such as credit, structured finance, and institutional lending. Each project brings innovative approaches and contributes to unlocking tangible value in their respective industries, reshaping the future of finance within the DeFi ecosystem. III. The Energy Sector: A Perfect Fit for RWA Adoption is an ideal fit for Real-World Asset (RWA) adoption, addressing challenges like infrastructure maintenance, funding constraints, and transitioning to renewable sources. The energy sector Tokenizing energy assets, such as solar farms or wind turbines, enables fractional ownership, and simplifies trading. Peer-to-peer energy trading empowers consumers and promotes renewable energy consumption. By democratizing access to the sector, RWAs attract more investment, fuel innovation, and facilitate the transition to a sustainable energy future. Additionally, RWAs can track PoW miners and provide them with green-proof credentials, ensuring environmentally responsible practices. IV. Conclusion In conclusion, the rise of (RWAs) in the crypto industry is imminent. These assets offer a unique bridge between the physical and digital realms, providing individuals with opportunities to invest in tangible assets using blockchain technology. Real-World Assets Within , Energy Web leads the way by tokenizing renewable energy assets, enabling wider participation and investment in sustainable sources. RWAs also facilitate peer-to-peer energy trading, empowering consumers and promoting energy autonomy. the energy sector Another strong use case could be tracking Bitcoin (or PoW in general) miners and providing them with green-proof credentials, ensuring environmentally responsible practices leading to carbon neutrality. However, the realization of RWAs' full potential requires collaboration, regulatory support, and user-friendly solutions. By embracing RWAs, the crypto industry can create an inclusive financial ecosystem, merging traditional and digital economies for a transparent, efficient, and sustainable future in decentralized finance.

Real-World Assets as the New Narrative in Crypto: Energy Sector as a Catalyst in the Paradigm Shift?

In the presentation below, Niklas Kunkel, Oracle Core Unit Facilitator at MakerDAO, talks about the role that oracles play in bridging real world assets on-chain. https://youtu.be/rFv4FWMtlRE?embedable=true Below are further explanations of key points highlighted during his talk. Introduction to MakerDAO & Stablecoins MakerDAO is a decentralized autonomous organization (DAO) that guides the development of the Maker protocol. The Maker protocol is built on Ethereum and makes use of smart contracts to generate and maintain their stablecoin, Dai. Stablecoins are cryptocurrencies that maintain a stable value by being pegged to other stable assets or by using algorithms. Stablecoins generally fall into the following categories; Stablecoins that are backed 1:1 by one or more currencies such as the US dollar and Euro. Oneexample of a fiat-backed stablecoin is . Fiat-backed: USDT Stablecoins that are backed by other cryptocurrencies like Ether (ETH). Since cryptocurrencies are more volatile than fiat currency, crypto-backed stablecoins are usually overcollateralized. This means that instead of being backed 1:1, the amount in reserves would be higher than the value of the stablecoins in circulation. Crypto-backed stablecoins are issued on-chain using smart contracts. is an example of a crypto-backed stablecoin. Crypto-backed: Dai Stablecoins that are backed 1:1 by physical commodities such as gold. is an example of a commodity-backed stablecoin. Commodity-backed: Paxos Gold Stablecoins that make use of algorithms to manage the circulating supply based on market prices. is one example of an algorithmic stablecoin. Algorithmic: Ampleforth According to Niklas, the Maker team developed one of the first oracles on Ethereum. Back in 2014 when they were developing the protocol, there were no oracle solutions available that suited their needs. The team decided to build their own oracle with the intention of switching to another service later on. However, nothing suitable was ever developed and MakerDAO still uses their own oracle today. Niklas is currently responsible for leading the oracle unit of the Maker protocol. DeFi, DEXs & CEXs Decentralized Finance (DeFi) has faced unprecedented growth over the last 2 years. As a result, Decentralized Exchanges (DEXs) have also seen a surge in the amount of usage, with volumes now with centralized exchanges (CEXs) like Coinbase. competing DEXs are peer-to-peer marketplaces built on chain that enable the permissionless trading of assets. This is done by creating liquidity pools and incentivizing users to deposit assets to these pools through a process called yield farming. refers to the process where users deposit cryptocurrency assets into liquidity pools in exchange for trading fees. Assets are automatically swapped between traders and liquidity pools using smart contracts. While CEXs have Order Books that match bids to asks, Automated Market Makers, AMMs, are essential to  DEXs like Uniswap or Curve, acting as the mechanism that sets the price of tokens in a liquidity pool. Yield farming Hyperreflexivity of DeFi In his presentation, Niklas describes DeFi as being “hyperreflexive” in nature. He illustrates this point by describing the following scenario; During bull markets, as the price of popular cryptocurrency tokens like Bitcoin and Ethereum go up, the demand for also increases. As a result, the yield that can be earned for lending also goes up in order to incentivize users to provide liquidity for this leverage. This leads to a large amount of capital flowing into DeFi protocols. leverage As more and more users start , the Total Value Locked ( ) on AMMs like and go up. This ends up serving as a positive feedback loop – a higher TVL attracts more and more users to put their capital into the protocol. The inherent problem with this hyperreflexivity is that when asset prices drop, all the feedback loops explained previously that help DeFi thrive go in reverse, and capital flows out just as quickly as it flowed in. yield farming TVL Uniswap Curve Connecting DeFi to the Real World According to Niklas, in order for DeFi to grow beyond this hyperreflexive bubble, it must be connected to the real world. There are over 100 trillion dollars worth of assets in the traditional financial (TradFi) system versus approximately 100 billion dollars worth in DeFi. Even in a bear market, there is a chance that DeFi can continue to grow by absorbing these Real World Assets (RWAs). The growth from that can outscale any negative macroeconomic pressures. Absorbing RWAs into the DeFi ecosystem would also lower overhead costs in traditional markets by minimizing the need for middlemen typically required in traditional finance. According to Niklas, DAI could be a benefactor of this as the most time and stress tested decentralized stablecoin. One problem with connecting RWAs to DeFi is that the majority of these assets are highly illiquid, meaning they are not actively traded on markets. It is also difficult to derive fair market values for these assets. Financial information pertaining to these assets are heavily censored, with limited information available about the relevant counterparties. If the asset originators are the only source of the data, there is a moral hazard involved as they would be incentivized to report market data that benefits themselves. Implementing RWA oracles In the framework prescribed by Niklas, in order to implement RWA oracles, 3 main players are required – The asset originator, an auditor and the data consumer, who is the ultimate end user consuming the oracle data. Asset originators should submit underlying data on the asset, and not the price. They should not be setting the price of an asset themselves. Rather, they should be submitting data that can be utilized to derive a fair price.  Asset originators are incentivized to provide valid data because an auditor is going to check that this data is correct. If the auditor concludes otherwise, the asset originator can get their credit ratings slashed. Nevertheless, asset originators are assumed to be adversarial and will try to obtain an edge where possible. The role of an auditor is to validate that the data supplied by the asset originator is legitimate. The data consumer will define a data model for how prices should be derived. Auditors then validate the data inputs provided by the asset originator, and plug these inputs into the aforementioned data model. In this model, it is important to note that it is the data consumer who is paying the auditor for their services. The auditor and the asset originator cannot be morally aligned, or aligned in any business sense. A good counterexample would be this from ‘The Big Short’, where the ‘asset originator’ is the one giving business to the ‘auditor’, incentivizing the auditor to fake the validity of the data inputs. scene MakerDAO & RWA Maker has begun the absorption of RWAs into the DeFi ecosystem through a series of partnerships stated below: – MakerDAO is helping to provide short term mortgages for people who want to buy and sell homes quickly for a profit. New silver – Credit tenant lease financing. MakerDAO provides capital, so 6S Capital can finance the construction of buildings when they have guaranteed tenants. 6S Capital – A financier which allows MakerDAO to divert USDC on their balance sheet into US treasuries. US treasuries are extremely liquid, resulting in higher yields with lower risks involved. Monetalis – Covered bonds backed by home loans. Forge wants to 40 million Euros worth of bonds, proposing a 30 million DAI debt facility. Societe Generale (Forge) finance In the current crypto market, there are many who believe that there is a lot of value to be extracted from traditional markets which could help offset some of the revenue lost from crypto. While embracing RWAs could help protocols like Maker maintain its position as a leading DeFi protocol despite market conditions, there is still some concern over the centralized aspect of traditional assets. In his interview with , manager of Real World Assets at MakerDAO, TJ Ragsdale, explained that “the goal is really to take advantage of all the value that lives out there in the real world, and as Maker — with our unique position in the market, build in transparency and determinism that we all love about crypto into those traditional systems.” Blockworks The Blockchain Oracle Summit was the world’s first conference to fully focus on the importance of oracles and the potential value they bring to DeFi and beyond. Leading oracle experts from around the world gathered in Berlin to take deep-dives into their work. Find out more about MakerDAO: MakerDAO Documentation MakerDAO Twitter MakerDAO Discord MakerDAO Youtube Niklas Kunkel Twitter Niklas Kunkel Github

How Oracles Act a Catalyst in Bridging Real World Assets On-Chain

2021 has been a big year for blockchain. We are seeing an explosive growth of new protocols and new projects - many of which are solving real-world problems. Blockchain proposes an entirely new way of doing things. From an authority-less marketplace to DeFi platforms that could entirely disrupt the traditional banking system, blockchain is helping us realize the dreams of tomorrow. To date, the majority of the population consider Bitcoin as the synonym of blockchain technology. But, in reality, Bitcoin is a popular, yet the minuscule application of the versatile blockchain tech. And the versatility of the technology has started to carve its name by disrupting the financial sector. Harmony.one, for one, is an interesting project effectively working to drive this global fintech revolution. So, I reached out to Harmony.one’s founder, Stephen Tse — an entrepreneur who sold his startup to Apple and worked on multiple infrastructure projects for Google — to discuss this revolution. Q1. Welcome to Unhashed. What’s your crypto story and how did you come to establish Harmony? I delved into the world of programming when I was just 12. My passion to understand the complexities of this world led me to get a Ph.D in security protocols and that’s how I learned to work on full-stack and use an end-to-end approach to tackle problems. Answer: With my knowledge, I worked on infrastructure projects at Apple and Google. In some cases, these projects were serving hundreds of millions of users. From there, when I took the next step in my career, it took me two years to understand blockchain at a deep level. Then I put together a team to build a network that could solve the interoperability and scalability challenges faced by first-generation blockchains. That was the beginning of Harmony. Q2. Cross-chain or interoperability is a hot topic in the blockchain space. What does interoperability mean and how does it benefit the blockchain ecosystem? Imagine if operating systems like Windows and macOS functioned in siloes. Or, if the iOS version of Gmail was unable to interact with the Android version of Gmail. Or, if Gmail was unable to interact with any other email platform. We would have surely adapted to these situations but working on the internet or exchanging data would have been extremely difficult. Answer: The same applies to blockchains. Without cross-communication between blockchains, the feasibility of products and applications built on them ceases to exist. By design, blockchains aren’t interoperable. Spending Bitcoin to own a character skin on an Ethereum game is not possible. Extrapolate this inability to solutions of scale, it equates to the blockchain being a platform for individual features and never a facilitator of full-fledged solutions. And for the scale of problems blockchain is trying to solve, individual features shall never suffice. A cross-chain communication is a must for blockchains to turn mainstream and provide scalable solutions. We all know the concerns over rising gas fees and transaction times in the Ethereum blockchain. However, it is home to thousands of dApps and DeFi solutions. So, at this juncture, interoperability is the only way out. Likewise, we at Harmony are operating a chain where ETH developers can jump onto the Harmony ecosystem, leverage our transaction speeds and low fees amongst other features, and return to the ETH blockchain. Until recently, developers were looking for a better blockchain amongst a few to develop their products. But, with interoperability, they can pick the best features of different blockchains while not compromising on the security or the utility of their product. Q3. You spoke about Harmony offering to solve interoperability issues of blockchain. Can you delve deeper into what Harmony does and how it achieves this? Currently, blockchains have built walls around them detesting the need for peer-to-peer communication with their counterparts. Given the diversity in blockchains, the walls have further grown in strength leaving developers to stick to their favorites while compromising on their visions. Answer: Harmony is superseding the walls with bridges, the ones that shall connect all the blockchains and empower developers with freedom of choice. Using cross-chain collaterals, we are ensuring the value of tokens is maintained while their application is widened across different blockchains. By bridging blockchains like Ethereum, Binance, and Bitcoin, we are enabling the digital transfer of a vibrant range of assets with negligible friction in fees or time. From providing tools to Ethereum devs to migrate codes across blockchains to enabling Bitcoin holders to earn on Eth-based dApps, we are providing an open platform based on interconnectivity. We provide scalable solutions on three fronts in network, storage, and transaction processing. Thereby, we can cater to premium blockchains as a layer-1 solution, rather than a layer-2 alternative. With our vision of ‘Open Consensus for 10B people’, we are committed to delivering a decentralized blockchain that provides quick and secure transactions. Q4. How sustainable do you think the DAO structure is for the future? To achieve true decentralization, decentralized autonomous organizations, a.k.a. DAO, act as a catalyst. They further the industry’s efforts in building an inclusive ecosystem. Right now, we are accustomed to trusting a specific group of people, who in the form of a company or organization provide services to us. Answer: And those in authority have complete control over the provision of services. This means there exists an unequal distribution of authority. Conversely, blockchain and DeFi divert our trust from people to technology and/or math-based algorithms. Now, who designs the tech infrastructure or the nuances of the algorithms? As a facilitator of true decentralization, DAO structures allow every party involved to have their say in the operations and management of the protocol or product. By removing hierarchy and promoting equality, DAO ensures inclusivity is upheld at all times. This also fosters transparency amongst the people involved, courtesy of the immutability property of the blockchain tech. In terms of sustainability, the DAO structure is right up there thanks to its perpetual undertaking. DAO’s fluidity beats all the traditional paperwork by a mile and ensures the continuity of the protocol/project. With a people-first or community-first approach, traditional firms can embrace the potential of the DAO structure. Q5. Recently, the crypto community was jolted by a massive hack on a popular network. Discounting what happened afterward, please share your thoughts on the security of blockchains. Also, what are the potential measures required to further protect our networks? The recent hack sounded like a death knell to the crypto industry and its credibility. It also garnered unwanted attention from the regulatory authorities which is the last thing our industry wishes for. However, there are certain steps that blockchains can employ to further their robustness and security. Answer: Overall, the structural integrity of a blockchain is impenetrable, given its decentralized nature. Not only data theft, but even tampering and/or manipulation of data is out of the question. These innate advantages have opened their use in applications like securing IoT devices, digital identities, and similar use cases. Blockchain, as an infrastructure, is robust and has no single point of failure, but security risks are far from being obsolete. So, this leaves the door open for solutions like better consensus algorithms, resharding processes, and others. Consensus algorithms that reduce centralization are a blockchain’s favorite. Take the proof-of-stake mechanism, for instance, it maintains network security via widespread delegation and incentivizes the participants. Topping it off with regular resharding ensures unbiased shard membership which further secures the blockchain. Similarly, other security measures can be employed by blockchains to uphold their integrity without compromising their utility to the end-user. Q6. What does the future look like for the Harmony project? How does the growth of NFTs and DeFi blend in Harmony’s roadmap for the coming years? We are excited to look at what the future of blockchain and crypto space holds for us and everyone. The existing potential and room for innovation bewilder all of us. If the potential is realized at scale, disruption of industries would be an understatement. Answer: At Harmony, we see ourselves being the norm of the industry in the coming years, thanks to our forward-looking solutions built on the lines of interoperability. Developers would love the flexibility of picking the best features of numerous blockchains, integrating them, and providing a wholesome product. With DeFi off to unparalleled growth, there is a need for improving the accessibility of DeFi solutions and products. We look forward to providing this by empowering an inclusive marketplace where assets, tokens, and products can be transacted at ease. Also, Harmony is working towards developing more bridges for independent blockchain networks. This shall improve the efficiency of transactions in both time needed and gas fees required. With regards to NFT, we have adopted it and launched Crazy.ONE, a subdomain marketplace where each of the subdomains is an NFT linked to a particular wallet. And with more than 1000 of them purchased, we have ensured the income generated is put to productive outcomes. Hence, we have used it to finance the DAO wallets. Our recent launch of Validator DAO is also a step towards an ideal future where decentralization is the permanent residence of the Harmony project. The future of Harmony is simple, adapting to the market trends, and providing value to our users with no compromise. Disclaimer: The sole purpose of Unhashed is to unhash (decode) information about projects innovating using blockchain and cryptocurrencies and share it with the community. The writer does not have any vested interest in any of the projects covered herein. Not that this article shares any, but still, taking investment advice from strangers on the internet is not a wise thing to do.

DAOs are a Catalyst for Decentralization - Unhashed #15

Since the launch of Bitcoin a decade ago, the blockchain has continued to grow in popularity. It has found use cases outside of cryptocurrency. In the fintech industry, technology is making a huge impact. As a result, startups and mainstream companies in the finance world are showing a lot of interest in this technology. The Benefits of Using Blockchain in the Finance World Blockchain technology brings several benefits to the finance world. These benefits include: • Dependability and Trustworthiness While various fintech solutions offer users convenience, the control of fintech platforms still lies with third parties. As a result, if the third party is not competent or professional, all the promised convenience is just a facade. Essentially, every user of a fintech solution has to place their trust in them. However, blockchain is helping to eliminate these issues. You do not need to trust the person behind a solution or even know how they operate. As long as their operation is powered by the blockchain, users are guaranteed it will work. • Increased Speed The current fintech sector is still highly reliant on the . In the traditional financial world, a single transaction can be backed up for days. If just one party does not corporate, the entire operation could be set back by weeks as the issue is investigated. The result is lower user satisfaction. With blockchain technology, even enormous transactions can be confirmed within minutes. legacy financial system • Reduced Operational Cost One of the major costs of any fintech is time. If a platform can reduce the time it takes between transactions, it can boost profits, which will reduce the cost of operating. Blockchain can help fintech startups achieve that. Besides that, using the blockchain eliminates third parties and the processing fees that they charge. The result is that using blockchain technology could help to cut the costs of a fintech platform by 50% or more. The Impact of Blockchain on the Fintech Sector The blockchain has already had a major impact on the fintech world. Here are some of the areas it is bringing change: • P2P Payments In the existing banking system, the payment infrastructure is costly and slow. However, using blockchain technology in the clearing and settlements industry could save the investment-banking world billions of dollars. Various firms in the banking sector are already working on solutions that would be powered by the blockchain. Amongst central banks, there is a serious push towards blockchain and digital currencies. Many of them are considering the launch of wholesale digital currencies that would be powered by the blockchain. A wholesale digital currency would be used for settlement and clearing and it could save an economy billions of dollars. Due to the inefficiencies of the existing payments systems, many soon. central banks could launch a blockchain-powered digital currency • Providing Banking to the Unbanked There are currently over 2 billion globally who do not have bank accounts. In short, they are unbanked. Using the blockchain will help people who are unable to open a bank account to open one. While billions of people do not have a bank account, many of them have smartphones. The blockchain exists purely in digital form and people could open a bank account via their mobile phone that is powered by the blockchain. As a result, the blockchain could help to open up the financial world to more people. • Blockchain and the Trading World In the current setup, the global trading market still relies on a lot of physical paperwork. For instance, if you purchase government bonds, they are usually in a physical form. Besides that, settling a transaction in the trading world is still exceedingly slow and can take up to three days to complete. With the use of the blockchain, every transaction could exist in a purely digital form. Through the process of tokenization, there would be no need for any physical paperwork. Third parties could be eliminated and a transaction could be completed in a matter of minutes. • Credit and Loans In the current system of finance, taking a loan or getting credit is a drawn-out process. You have to provide collateral, your details, and in most cases, you have to sign physical paperwork. By using the blockchain, it will help to speed up the process of acquiring loans from days to just a few hours or minutes. The blockchain offers privacy, protection, and . increases security • Regulatory audit and Compliance The regulatory compliance sector is estimated to be worth around $118 billion globally. Various startups in the blockchain world are coming with regulatory compliance solutions that are powered by blockchain technology. A major benefit of the blockchain is that it creates immutable records of each transaction. Consequently, auditing a company’s operations will be much easier. The immutability of the blockchain also helps to reduce the possibility of erroneous reporting, which ensures the integrity of all records. The Nimbus Fintech Solution One of the companies created to leverage the use of blockchain technology in the fintech sector is . The founder of the company, is a senior risk and financial management, CEO and an entrepreneur who advises heads of states, ministers of finances and CEOs of global corporations, decided to build a bridge between blockchain, cryptocurrencies and traditional finance. The company’s goal is to create a fintech ecosystem that deeply integrated the blockchain into the legacy financial system. Nimbus Andrea Zanon Nimbus platform's team has the simple goal of combining the best advances in the crypto world and the cloud computing industry into a multi-faceted fintech ecosystem. As a result, users will have access to services and tools that allow them to maximize the profitability of their crypto investment. • The Avalon App To achieve the goal of profit maximization, Nimbus platform launched the Avalon App. The app makes profits through arbitrage trading. To make money, users deposit funds in the app and receive rewards daily. The longer they keep funds in the app, the more they earn. • IPO Hub- The Flagship Project of the Nimbus Platform The Nimbus IPO Hub will allow anyone to take part in an IPO even when he or she does not have the high minimum buy-in needed. They can achieve this through the Nimbus Stable Coin (NSC), which is a stable coin. To invest in an IPO, users only need to purchase NSC that they invest via the Nimbus IPO Hub. Nimbus will then take the NSC, exchange them for money, and purchase shares in an IPO. Once they are done, they will share profits with the NSC holders. • The Nimbus Token The Nimbus Token (NMBT) helps to ensure the independence of the ecosystem. It is an ERC-20 token, the capitalization of which is ensured by the total unrealized profit from the company's trading using the Avalon arbitration algorithm. The starting price of token was 0.00005 BTC, at the moment it is 0.00011541 BTC. Nimbus has numerous other products planned that will form the complete ecosystem. They include the Nimbus P2P lending platform, the social trading platform, the Nimbus Coin Tracker, and the Nimbus Crypto Merchant. The goal is to launch an all-inclusive crypto ecosystem for everyone in the crypto world. The Future of the Blockchain in the Finance World Blockchain technology is still quite young. However, it already shows a lot of promise in the fintech. The efficiency and speed that it has to offer will no doubt make a huge impact on the financial world.

Blockchain in Fintech: A Catalyst for Disruption in Finance World

It’s understandable that early stage investors have shown they’re willing to take risks with companies like Uber or Airbnb that are up against fragmented regulatory authorities and whose risk is contained to operations. These, for the most part, have been manageable legal risks as companies scale. However investors are normally very averse to novel structuring or securities risk, and for good reason. Securities risk is one of the few risks that can’t always be contained behind the corporate veil and tends to hit investors hard at any size. Initial coin offerings (ICOs) seem to have skipped over all that. However the current discussion of enforcement overly obsesses on the question of which tokens are securities, and because most ICO investors don’t have regular interactions with the SEC they forget the regulator’s true mandate. ICO In the mad rush to participate in jaw-dropping financing rounds, investors may have exposed themselves to unexpected — and profound — financial risk. When the SEC asserts its full authority it could entirely reshape the ICO market and have serious legal consequences for large investors. More Than Defining What A Security Is Right now the conversation surrounding ICOs is mostly about what qualifies as a security. As the demonstrates, the SEC isn’t going to give a free pass to ‘utility tokens’, or tokens that are used by the business operationally. If you’ve marketed an ICO on the basis of the potential for profit, you have an unregistered security and a lot of lawyers in your future. Munchee case The early stage capitalists, high net worth individuals, and entrepreneurs participating in ICOs are mostly left alone by the SEC in private transactions. Most haven’t ever had to get their Series 7 / 63, which are basic securities law certifications. This creates a culture of compliance that looks very different to someone who works on a trading floor, and there are blind spots in the larger discussion of ICO compliance. venture There really hasn’t been much change in investor outlook based on the SEC beginning to tweak its view of what tokens qualify as securities. Many investors look at the risk of ICOs basically in these terms: “Yes, the token might be found to be a security. Sure, there might be fines — for the company — and maybe the company might go out of business. But the upside is huge, and we can take some losses.” However the reality could be much, much worse. Why The SEC Exists The SEC didn’t come into existence because people didn’t understand what securities were, or needed enhanced legal structure for securities. The to control trading on insider information, and to prevent the attendant fraud and financial manipulation of everyday investors. SEC exists So what every major ICO participant should be asking is what other rules might have been broken once the SEC, inevitably, determines that the tokens you invested in are securities. As the SEC is investigating the marketing claims of ICOs to determine whether they’re securities, how long do you think it will take them to notice that marketing claims and material information for some investors are markedly different from others? How many ICOs try to curry favor with big names by giving insider tips? How likely do you think most ICOs are to be led by people familiar with regulations relating to disclosure of inside information? This is where the risk of ICO investment could leak back from company management to investors. Per the established by the Supreme Court in 1984, the recipient of inside information violates securities law if he or she should know the tipper is breaching fiduciary duty. Dirks Test That can be a broad standard. In the case of Raymond Dirks of Dirks Test fame, he didn’t even profit from the information — he simply passed on information to investors who sold. How much of that do you think has happened with ICOs? Importantly, the Dirks case also arose from an existing investigation into a company violating securities law. And SEC investigations often happen as follow-ons to civil suits from investors, or from priority areas of policy enforcement. Cases like Munchee are making it clear that many tokens can be viewed by the SEC as securities, and large investors are attractive targets for litigation. How long before the SEC acts, or private investors file civil suits of their own? Tezos has already proven that it doesn’t take SEC action to . get the ball rolling Historical Analogue A salient historical analogue in enforcement history is the junk bond market, which grew from $10B in volume in 1979, to $189B in volume in 1989. This represented a 34% compounded annual growth rate over this period, and caused the SEC to examine how stringently major players were complying with existing regulations. The market cap of the top 100 ICOs is and an overripe target for SEC enforcement. ICOs are just hitting the in capital raised, are entirely unregulated, and . Even more troubling, the top ten investment fund ICOs have raised $371.1M, and at least four have tokens trading at roughly half of what they raised on literally months ago — those kinds of losses are the sort that draw lawsuits and attract the attention of the SEC. over $61B $5B volume mark surpass early stage VC funds raised The question really isn’t if, but when we’ll see the of ICOs. Milken was indicted for a series of violations that might look familiar — failure to disclose commission schemes, tax evasion, and insider trading. He was sentenced to ten years in jail despite working regularly, by many accounts, with compliance staff at Drexel Burnham Lambert. Many believe he was a victim of the SEC wanting to make a point to an overheated market. Michael Milken ICO Compliance In The Future Eventually it seems possible the market may be constrained to an era where ICOs are traded on registered exchanges exclusive to accredited investors. CoinList-like exchanges for Know Your Customer (KYC) compliance are well-placed for this. For those hoping that consumers will someday directly access these equity returns, the SEC’s core mandate of controlling information to the benefit of retail investors will likely make that project impossible. Startups would have to become markedly more sophisticated about releasing information, board members would have their hands tied in communication, and cost for compliance would be prohibitive without substantial modification of SEC regulations. Once the market calms down and the SEC begins approving them, ETFs will likely be able to act as an ICO vehicle for the public (as they currently do with venture). Overall this doesn’t really strike me as revolutionary so much as incremental. The most interesting change is the potential reduction of barriers for long-term private investment to gain liquidity after shorter holding periods, or potentially to become underwriting capital altogether. ICOs could allow angel investors to get liquidity within reasonable timelines (rather than 10–12 years), enabling larger bets and for a wider range of entities to access early stage equity returns directly without complex, lengthy, expensive transactions. A more robust market could help address the challenges of capital-intensive startups, as we’ve seen with some ICO megaraises, allowing for more innovative companies. Certain venture firms might even become more similar to investment banks, performing underwriting functions for much earlier stage companies entering the token markets. What seems likely, at least, is that ICO proponents are going to have to limit themselves to innovating within the pool of accredited investors. Once the SEC files its first insider trading suit against a venture firm, the willingness of large investors to finance securities risk will dry up. Did you enjoy this story? Please consider sharing it. Thank you!

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