Ethereum was the first generalist blockchain to popularize Decentralize Finance (DeFI) through its use of smart contracts. In turn, they created a rich ecosystem of dApps as web interfaces to the blockchain’s smart contract, so far accounting for 3,778 dApps across 6,730 smart contracts. Such dApps have recreated virtually the entire financial system – borrowing, lending, market making, exchanging – and are now moving toward blockchain gaming metaverses and NFTs.

Yet, this monetary revolution transpired on fragile legs. Ethereum might’ve amassed DeFi momentum with the highest number of developers and dApps, but its Proof-of-Work foundation makes it prohibitively expensive to use.

Contrary to the original vision of crypto payments and transactions as frictionless and cheap, Ethereum leaves for progress to be made. An estimated 71% of consumers prefer to pay with a debit or credit card, and for good reason: transactions are simple, with some degree of protection, they’re generally fast (from the consumer’s perspective – they swipe and leave the store with their goods), and they’re free. Merchants pay a fee, which is usually under 3%.

Transactions on Ethereum are much different when compared to such traditional payment processors. Fans of Ethereum argue the solution lies in the ETH 2.0 upgrade, transforming Ethereum to a Proof-of-Stake blockchain, the Beacon Chain. This will be Ethereum’s new backbone, managing all shard chains and validators, as detailed in the ETH 2.0 upgrade roundup. At the end of October, Ethereum completed the Altair upgrade, bringing it one step closer to the Beacon Chain.

What Does the Altair Upgrade Bring?

After the Altair upgrade launched on October 27, 2021, ETH shortly thereafter eclipsed its all-time-high price (at the time) of over $4,500. With hopes inflamed, in this delicate transition period, both Ethereum’s Proof-of-Work (PoW) and Proof-of-Stake (PoS) consensus work in parallel to each other.

As the biggest Beacon Chain upgrade since December 2020, Altair is a test run to make sure the projected 2022 Ethereum-Beacon Chain merger will be successful. Here are some of the Altair upgrades:

Light clients for easier interaction with the network due to lower computational and bandwidth costs than full nodes.

Incentive restructuring which brings more efficient bit yield to reduce complexity, inactivity leak quadratic function that is based per validator, instead of global. The latter helps validators that have over 80% percent participation rate.

Bug fixes for validator rewards.

In theory, they should all lead to an Ethereum 2.0 that is as fast and affordable as other layer-1 competitor blockchains that have recently risen in popularity. In the meantime, Ethereum will continue to rely on Layer 2 solutions to make it so. However, there is another matter emerging outside of Ethereum’s scalability. How decentralized is it really?

Ethereum’s Decentralization Examined

If there are other smart contract platforms with both negligible fees and fast transaction speeds, Ethereum’s strongsuit remains its wide adoption and decentralization. On PoS blockchains, validators are equivalent to PoW’s miners, making the network run.

Simply put, a validator is software running on node hardware. A validator’s job is to approve blockchain transactions and pass this data to a node, which will then add it to the blockchain. According to ethernodes.org, Ethereum is presently hosted by 2843 nodes, most of which are concentrated in Northern America and Europe.

In percentages, the US holds 35.21%, Germany 15.20%, China 6.79%, Singapore 4.89%, Finland 3.87%, France 3.52%, Canada 2.92%, and the UK 2.85% Combined with other countries, North America and Europe make up nearly 80% of Ethereum’s nodes.

To illustrate this concentration further, Ethereum 2.0 nodes, on the Beacon Chain, are even more concentrated on the same two continents.

Out of 4,688 Beacon Chain nodes, over a quarter, 27.22% are in the US. Combined together, the two c...

In its latest Digital Asset Management Review, CryptoCompare has reported that in November, alternative crypto-asset investment products, such as Ethereum, Litecoin and Solana have outshined those of Bitcoin ETPs, as they raked in better gains than the flagship digital asset.

Bitcoin-based products perform poorly in November

The report observes that the AUM of Grayscale’s Bitcoin (GBTC), which owns many of the trusts, plummeted by 10.1% to $38.1 billion, however, alternative asset Ethereum (ETH) rose by 3.6% to $12.9 billion.

According to the report:

“ETC Group’s BTCE product regained the position of highest AUM ETN/ETF product with a gain of 1.2% to $1.5bn. This was followed by Purpose’s Bitcoin ETF (BTCC) and 3iQ Coinshares’ Bitcoin ETF (BTCQ) which fell 6.5% and 10.1% to $1.4bn and $1.2bn respectively.”

It was also revealed that the average daily trading volumes of the entire crypto-based ETPs have fallen by 13% to $732 million in November, however, popular ETH-based exchange-traded products rallied to new heights though it was still below the highs seen during the beginning of the year.

Interestingly, Litecoin and Solana-based exchange-traded products performed well, while Grayscale’s crypto basket fund, on the contrary, only returned a negative gain of -15.5%.

The CryptoCompare report continued that several BTC-based investment products suffered major losses. For example, ETC Group’s BTCE product was one of the biggest losers as it was down by -13%, followed by Grayscale’s GBTC trust, with -10.1%. However, among the BTC-based investment products, only Valour’s BTCZERO performed fairly better, losing just -6.6%.

You may recall that the value of Bitcoin plummeted to below the $60k mark during the month. On the other hand, altcoin-based products were favored in the month, as the product of 21Shares’ ASOL (Solana-based product) and Grayscale’s LTCN (Litecoin-based product) returned 22.0% and 14.9% gains respectively.

This report corroborates a number of previous CoinShares reports where the crypto analytics site reported that other digital assets like Solana and Cardano have seen more institutional investors recently than Bitcoin.

MicroStrategy announced earlier today that it has purchased an additional 7,002 Bitcoin (BTC). The latest purchase makes Michael Saylor’s company the largest known BTC holder among non-crypto companies.

More bitcoins for Michael Saylor

One of the largest software companies in the world has just announced that it has significantly increased its cryptocurrency holdings.

According to its latest Form 8-K filing with the SEC, MicroStrategy has purchased an additional $7,002 BTC for $414.4 million in cash. Michael Saylor, the CEO of MicroStrategy, said that the bitcoins were purchased for an average price of around $59,187 per BTC.

While this isn’t the largest purchase MicroStrategy has made when it comes to cryptocurrencies, it still significantly increased its Bitcoin position—the company now holds 121,044 BTC.

The 121,044 BTC were acquired for $3.57 billion, at an average price of $29,534 per BTC.

MicroStrategy has purchased an additional 7,002 bitcoins for ~$414.4 million in cash at an average price of ~$59,187 per #bitcoin. As of 11/29/21 we #hodl ~121,044 bitcoins acquired for ~$3.57 billion at an average price of ~$29,534 per bitcoin. $MSTR

Michael Saylor⚡️ (@saylor) November 29, 2021

The market reacted strongly to the news about MicroStrategy’s latest purchase, with Bitcoin jumping over 7% in the hours following the update. And while it immediately went through a brief 2% consolidation, dropping to $57,100, the charts still look tense as the market anticipates further growth.

Each of MicroStrategy’s previous Bitcoin purchases significantly swayed the market, and with three months since its last major announcement, we could see additional price action in the days to come.

Ordinarily, when a crypto network sees an upgrade, its price tends to have a positive reaction, like it was seen during the launch of Ethereum’s EIP-1559 when the value of the asset rallied above the $3,000 mark again.

However, in the case of Cardano, despite the implementation of its highly anticipated Alonzo upgrade that brought smart contract features to its blockchain, the value of the asset has seen a massive decline in its price, dropping by close to 50% according to data.

Cardano’s price decline since Alonzo upgrade

Cardano’s price had peaked at $3.10 on Sept. 2 as anticipation of its Alonzo upgrade had reached a crescendo while also leveraging on the news of El Salvador’s BTC adoption. But the general crypto market witnessed a sharp decline on the day that El Salvador officially adopted the flagship digital asset.

Cardano parent company, Input Output Hong Kong (IOHK), would later announce the implementation of the Alonzo upgrade on the Cardano blockchain thereby bringing the much anticipated smart contract features to the asset.

This announcement, though, had a positive effect on the value of the asset, as it led to the price moving to $2.71; however, this did not last long as the price plunged below $2.5 less than 24 hours after.

Data from CoinMarketCap shows that since the implementation of the Alonzo upgrade, Cardano’s market cap which was very close to breaching the $100 billion mark has plummeted to just above $50 billion with the asset losing its bragging right as a top 5 crypto asset by market cap too.

Solana capitalizes on Cardano’s price decline

While Cardano’s price has declined rapidly since September, Solana, another digital asset that has been dubbed the “Ethereum killer” has seen a massive rise in its value and adoption from institutional investors.

Per available data, Solana’s value still reached a new ATH of $260 on November 6. Apart from that, DeFi protocols built on its network have seen their TVL rise to over $14 billion within the same period. Another fact worth noting is that the adoption of NFTs on Solana has been rising thanks to its partnership with FTX.

At press time, Solana is the fifth-largest asset by market cap and it is currently trading for $203.

Blockchain network Solana has disclosed key findings highlighting the network’s fast processing and minimal energy consumption in its energy report for November.

Solana foundation claimed that a transaction processed on Solana consumes less energy than two Google searches, making it one of the fastest networks for conducting crypto transactions.

Founded in 2019, Solana’s (SOL) blockchain ecosystem has quickly emerged as one of the most popular proof-of-stake networks, with a record of processing 50,000 transactions per second.

Solana on sustainable energy consumption

The report outlined Solana Foundation’s collaborative efforts with Robert Murphy, an energy and climate advisor, to help the foundation devise “environmental impact of transactions performed on Solana global state machine.”

ItstaIt stated a single transaction conducted on the network utilizes 0.00051 kWh or 1,836 joules of energy. According to Google, average power consumption while conducting a Google search takes about 1,080 joules of energy.

Solana, being less decentralized than Bitcoin, uses 1,196 validator nodes that can process 20 million transactions in a year. The network has also issued fresh statistics outlining their average energy consumption per year to be 3,186,000 kWh.

The report also states that the network might also implement a new program before the end of this year that will enable Solana to become carbon neutral and facilitate eco-friendly transactional output.

As an efficient proof-of-stake network, Solana is far less likely to consume energy as compared to networks that employ proof of mining mechanisms to process transactions.

According to Statista, a single Bitcoin transaction consumes approximately 4,222,800,000 joules, which may induce an energy crisis later if energy emissions are left unregulated.

Kraken CEO Jesse Powell took to Reddit this week to discuss the situation surrounding the dropping of Monero in the U.K.

He implied it was a decision he didn’t want to take, but with one eye on the “broader business” in the U.K, it was something he was forced to do.

“Unfortunately, we have to pick our battles and look out for the broader business in the country.”

Driven by Financial Action Task Force (FATF) directives, privacy tokens have become demonized over the past two years or so. This has led to many instances of exchanges delisting privacy tokens over this period.

Powell explains the reasons why Kraken dropped Monero

In a company email shared on Reddit last week, crypto exchange Kraken said it would end Monero support for its U.K customers.

“On the 26th of November, all Monero (XMR) trading on Kraken will cease in the UK. This includes Instant Buy/Sell Services as well as order book trading on XMR/BTC, XMR/USD, and XMR/EUR.”

While the crypto community is generally sympathetic and understanding of the situation faced by centralized exchanges, Powell felt it necessary to talk more about the situation.

He said the move is likely permanent until such time as U.K authorities better understand the value behind Monero or more effective surveillance tools are developed.

“I hate to turn away business but I don’t think we’ll be approved to support Monero again in the UK until the regulator better understands its value or feels like they have better surveillance tools.”

Powell added that Kraken continues to support Monero, and other privacy coins, in as many jurisdictions as possible. With that, he called on the U.K crypto community to contact their local Parliamentary representative to voice their opinion on the inequitable treatment of privacy coins.

Will it make a difference in the end?

Privacy coins, like Monero, are often vilified as the choice for cybercriminals or as a means to launder money and evade taxes.

But others see them as the last line of defense in protecting personal data and privacy. Those who hold this view tend to oppose the centralized oligopoly of tech giants, citing the situation as intrusive and parasitical.

“They seem to dominate so much of the technology, push the limits of privacy and ultimately commoditize the ideas, thoughts, and actions of individuals.”

However, ultimately, the efforts of regulators may come to nothing as decentralized exchanges will likely step in as the go-to place to acquire privacy tokens.

After hitting a new all-time high of $69,000 on November 10, Bitcoin has been caught in a downtrend. Friday’s 9% swing to the downside sent jitters across the market, but strong support at the $53,800 level proved fortunate for bulls.

Since then, two further retests at $53,800 have also held firm. Crypto YouTuber Lark Davies observed that the latest bounce keeps alive a five-month uptrend line. Implying that, despite the uncertainty of the past few days, the macro-bull is still on track.

“WHOA!!! #bitcoin just bounced from an insane trend line retest!”

Since trending down from its all-time high, sentiment has also dived, moving into fear over the weekend. Currently, the Fear & Greed Index gives a reading of 33, slightly up from yesterday’s rating of 27. But still, characteristic of fickle market sentiment.

As IOHK CEO Charles Hoskinson mentioned at the start of the downturn a week ago, focusing on short-term price action and panicking is the wrong approach to take.

What Hoskinson calls for is a greater focus on the bigger picture, which, as he sees it, is the eventual adoption of crypto on a mass scale. While he couldn’t put a price on that, as it relates to ADA, if that were to happen, early investors (and hodlers) would be better off long-term.

How the recent Bitcoin downturn stacks up against others in 2021

While the recent sell-off may have sparked fear in certain sections of the crypto community, as far as sell-offs go, it was the least severe one in 2021.

Analysis by Glassnode looked at drawdowns from the all-time high to calculate a percentage for each sell-off in 2021. The recent November drawdown comes in at just -21.8%, the smallest drop by this criterion.

“#Bitcoin has traded down -21.8% off the ATH during this months [sic] correction. It may be a surprise that this correction is actually the least severe in 2021, measured in terms of drawdown from ATH.”

The other drawdowns in 2021 show January, February, April, and September ranging from -24.2% to -37.2%. With the May to July sell-off counting as the most severe, at -54%.

The May to July period was triggered by a series of adverse reports starting with Elon Musk’s U-turn on Bitcoin due to a belief Bitcoin mining is highly polluting. During this period, the other prominent piece was China ramping up anti-crypto moves, including a mining ban and further restrictions on retail crypto traders.

Although Bitcoin’s trendline remains intact, sentiment won’t change until the price moves back above $59,000. Nonetheless, today’s rally was a welcome relief for those worried about the end of the bull cycle.

Market intelligence platform Blockdata has suggested in a new report Bitcoin could outstrip credit card giant Mastercard in the number of dollar transactions value processed.

Bitcoin processes more dollar value than PayPal

Just recently, Bitcoin overtook the giant payment tech company, PayPal, in terms of value transfer. At the time of writing, the Bitcoin network recorded about $489 billion in processed value per quarter while PayPal’s value was around $302 billion.

While this represents a major milestone for the crypto industry, the value pales significantly against that of Mastercard and Visa—the other leading payment companies in the world.

Per available data, the two credit card giants processed around $1.8 trillion, and $3.2 trillion worth of transactions in the previous quarter respectively.

If Bitcoin’s network value is compared against those two, it would represent just 27% and 15% of the transaction volume processed by those giant fintech companies.

How Bitcoin can match Mastercard, others

Blockdata, however, in a November 25 report titled When might the Bitcoin network process volumes like Mastercard and Visa? suggested how the Bitcoin network could match these companies in the Dollar amount of transactions being processed.

“If Bitcoin were to increase its value transferred per transaction today by 260%, it would be processing an equivalent volume to Mastercard on a daily basis.”

The report also identified a rise in the price of Bitcoin as another potential factor that could send the value process of the Bitcoin network to the same level as Mastercard.

According to the report, if the flagship continues at the pace of its current growth, it would match Mastercard’s level in a couple of years, i.e. if the current pace of growth is sustained, Bitcoin could be processing the same level of transaction with the payment company by as early as 2026.

However, if Bitcoin’s yearly average price is put into consideration, it could take as long as 2060 before the network is able to match that of Mastercard.

The report concluded that even if BTC is unable to match that of those payment companies soon, it has performed admirably well for a network that began a little over a decade ago.

The first thing most people do when entering crypto using a DEX is to exchange their fiat currency for stablecoins, which can later be exchanged for other tokens.

However, besides being the most important channels for users to start investing in crypto, stablecoins are also the foundation of the whole DeFi industry—acting primarily as a medium of exchange but also being used for liquidity pools and yield farming.

The market cap of stablecoins is still dominated by centralized stablecoins, with USDT occupying half of the market. DAI, the leading decentralized stablecoin, ranks fourth, while UST, an algorithmic stablecoin, follows in fifth place.

Due to its close relationship with fiat USD, Tether has naturally attracted attention from regulators. There has also been rising concern that the currency’s under collateralization now poses a systemic structural risk.

However, centralized, decentralized and algorithmic are all different. Are they all equally unstable? Is the fear of stablecoins warranted? Could Tether bring down all of DeFi?

1. Decentralized Stablecoins

USDT, which has a first-mover advantage, is the dominant centralized stablecoin. Its issuance model is that a user sends a certain amount of USD to Tether’s bank account, and Tether will transfer the same amount of USDT to that user after confirming receipt of the corresponding funds.

USDT’s price movements mainly stem from the degree of credit recognition of the issuing company, the depository bank, and the USD by the holders of the stablecoin.

Tether’s transparency and compliance issues are problems that centralized institutions cannot get rid of. However, the huge number of users and wide use case base accumulated by USDT make people use it anyway.

USDT’s market cap has been steadily growing, rising to as much as three times what it was at the beginning of the year in early November. USDC, in second place, has less than half of USDT’s market cap, despite being more transparent in its disclosure.

Centralized stablecoins rely on fiat currency to keep their projects viable. Compared to decentralized stablecoins, centralized stablecoins are vulnerable to regulation, and the fiat coins stored offline cannot be queried and bound by on-chain protocols.

Despite the decentralized spirit of blockchain, a large number of key projects, like Tether, are centralized. Why is this problematic?

Imagine if the SEC brings charges against Tether, or if Tether is found incapable of providing sufficient reserves. Users holding USDT will not be protected from losses.

2. Overcollateralized Stablecoins

DAI, MIM, LUSD

MakerDAO, which launched in 2018, has led the way in the development of overcollateralized stablecoins. As a result, DAI has become the market cap leader for this category of stablecoins. Although Liquity, which went live in 2021, innovated and improved on MakerDAO, the lack of use cases for its stablecoin, LUSD, has limited its adoption.

Abracadabra, which has a model similar to MakerDAO, has grown rapidly in two months with its interest-bearing tokens collateral, and the market cap of its stablecoin, MIM, has surpassed that of LUSD, which was one step ahead of it.

Collateral

Overcollateralized stablecoins mint $1 worth of stablecoins by depositing collateral worth more than $1. The collateral can therefore be other tokens that are not stable in their own way such as ETH, protocol tokens, and LP tokens. Such stablecoins are on the same chain as the collateral and the main risk comes from the fluctuation of the value of the collateral, so the liquidation mechanism of such protocols is particularly important.

On the collateral side, MakerDAO has introduced centralized assets such as USDT and USDC since March 2020, and doubts have grown about whether DAI is decentralized enough. The risks of DAI are tied to centralized stablecoins.

Liquity, a protocol whose only collateral is ETH to mint LUSD, strives to be decentralized in all aspects and has better capital utilization and li...

The following is a guest post from Sebastian Quinn, the co-founder of Yieldly, a DeFi suite built for the Algorand blockchain.

While some have come close, none have quite managed to overthrow the incumbent — neither in user adoption nor market share. However, as time goes on and scalability and efficiency qualms grow stronger, so too do Ethereum’s contenders.

When it comes to pinpointing which networks stand a fighting chance at usurping Ethereum’s position as the most popular protocol, Algorand’s extensive network of partners and stellar reputation among developers and crypto enthusiasts aren’t to be dismissed.

Leading the charge

Silvio Micali founded Algorand back in 2017 and continues to oversee all research on theory, security, and crypto finance today. Micali has been on the faculty at MIT’s Electrical Engineering and Computer Science Department since 1983, placing him on par with some of the early cypherpunks.

Indeed, Micali went on to win the Turing Award in 2012 for his contributions to cryptography, most notable of which was the creation of zero-knowledge proofs — allowing parties to prove or disprove something without having to disclose any pertinent data.

Algorand’s reputation among developers is undoubtedly a result of its association with Micali and his substantial work in the cryptography field. In this respect, Micali’s achievements and input shouldn’t be taken lightly when comparing Algorand’s prowess against that of other blockchain networks.

Fostering innovation through technical development

Ethereum may have already made a name for itself in the NFT space, but Algorand is closing in rapidly. Just over a month ago, the Algorand Foundation announced the launch of the Algorand Virtual Machine or AVM. The AVM presents a more robust system to create dapps that can scale to be used by billions globally.

The upgrade will bolster smart contract capabilities, allowing for more complex applications and unlocking functionality for DeFi and NFT dapps previously unseen within the Alogrand ecosystem. Most importantly, the AVM will also give developers the necessary tools to write smart contracts in Python or Reach — making smart contract development on Algorand accessible to a far broader developer demographic.

With the ecosystem looking to rival that of the Ethereum network, instilling novel smart contract capabilities and reducing barriers to entry is integral to attracting new developers and projects.

Investing in the ecosystem

In recent months, Algorand has cultivated quite the following among independent developers and companies looking to take advantage of the network’s scalability to build their DeFi and dapp projects. This is, in no small part, due to the numerous incubators, funds, and accelerators offered by the Algorand Foundation.

In September 2021, the project launched a $300 million dollar DeFi fund focused on bootstrapping innovative DeFi-centric protocols. The fund’s mandate was to support infrastructure and applications that foster ecosystem utility, liquidity, and growth.

This isn’t the first time the Algorand Foundation has reinvested into ecosystem development. In April 2020, Algorand announced an investment of 250 million ALGO, worth approximately $50 million at the time, to encourage opportunities across application development, tools & infrastructure, research, and education & community.

PureStake’s AlgoSigner is just one of the many successful projects that received Algorand’s grant to build their product, a wallet extension for Chrome that lets users approve and sign transactions generated by Algorand applications. Another was Yieldly, the first DeFi protocol built on the Algorand blockchain and a launchpad for promising Algorand-based projects.

Algorand has gained a competitive edge over Ethereum by actively investing in talent to build Algorand-native products and expand their ecosystem as rapidly as possible.

Furthermore, 21Shares AG recently launched an Algorand ETP on the SIX Swiss exchang...