What is onchain analysis or how blockchain gives signals
Traders and investors try to predict the price of bitcoin using the usual technical and fundamental analysis, but the use of the first cryptocurrency blockchain, has led to the emergence of a new direction.Onchain analysis is a set of metrics for predicting the price of cryptocurrencies based on blockchain data.It sounds obscure, but if major wallets start selling an asset, hence the bull market is about to end. Or in case of mass sending of stablecoins to crypto exchanges, it is logical to expect cryptocurrency purchases and price increase.There are so many metrics of onchain analysis and if you want to break them down in detail, let's collect 750 👍For example, in the picture you see The Puell Multiple, which shows the ratio of the value of BTC mined per day in dollars to the 365-day moving average. This indicator gives great signals when to buy and sell bitcoin, today it is in the neutral zone.
The number of transactions in the bitcoin mempool has dropped from 500,000 to 27,000
Just over 2 wks ago, the clutter in the #bitcoin mempool was quite noticeable, with over 500,000 unconfirmed txns waiting to be processed by miners.
However, a noticeable decrease in the issuance of ordinal inscriptions three days ago led bitcoin miners to significantly reduce the number of unconfirmed transactions to 153,000.
On October 3, 2023, the situation improved significantly and miners managed to further reduce the figure to 27,210 transactions, virtually eliminating the backlog.
This wk, the total number of records issued on the bitcoin blockchain passed 35 million, though the pace has slowed to less than 100,000 daily.
On Oct. 1, a total of 87,180 records were added to the blockchain; the next day saw a drop to 50,176 records.
Lot of you must have forgot a legendary coin $SC .. SIACOIN … make sure you have that in your bag and $DGB .. for the upcoming bull run .. !!!
There were some untold stories left in the last bull run ..
Like ZIL , DGB , SC …. you will see them climbing solid ..
Now this does not mean you go all in them ..
These has to be DCA’d and will take time ..
Everything takes time .. and its not a new thing at all for a coin to pop out 5-7 % all of a sudden now specially in the coin like these , which have been in the accumilation zone since ages .. !!!
ZIL was shared here many a times .. however DGB and SC are something no body is paying attention to and these coins pop out ..
Decentralized finance (DeFi) has revolutionized the financial landscape by enabling individuals to access new opportunities for earning passive income and engaging in decentralized finance.
One of the key features of DeFi is yield, which refers to the returns generated by participants in various DeFi protocols through activities such as lending, borrowing, staking, and yield farming.
In this article, we will explore:
The concept and benefits of DeFi yield
The mechanics and challenges of yield farming
The emergence and advantages of real yield
The leading protocols that offer real yield to users
Let's dive in!
What is DeFi yield?
DeFi yield is the term used to describe the returns earned by participants in DeFi protocols through various activities such as lending, borrowing, staking, and yield farming. These activities involve locking up assets in smart contracts in exchange for rewards in the form of tokens.
One of the main advantages of DeFi yield is that it democratizes access to financial services, allowing anyone to earn returns on their assets regardless of their location, identity, or status. It also empowers individuals to take control of their financial future, independent of traditional financial institutions that often charge high fees, impose restrictions, and lack transparency.
How does yield farming work?
Yield farming is one of the most popular activities in the DeFi space where users provide liquidity to decentralized exchanges (DEXs) or lending protocols and receive rewards in the form of tokens. By depositing their assets into liquidity pools, users contribute to the overall liquidity of the protocol and, in return, earn a share of the fees or additional tokens provided as incentives.
In addition to trading fees, some protocols offer incentives in the form of governance tokens. These tokens represent ownership in the protocol and allow holders to vote on decisions related to the protocol's development and direction. Governance tokens can also have value in themselves, depending on the demand and supply dynamics of the market.
Why does DeFi offer high yields?
DeFi platforms often offer higher yields compared to traditional financial systems due to various factors. One key reason is the elimination of intermediaries, allowing for lower operational costs and more efficient allocation of funds.
Additionally, DeFi protocols leverage the power of smart contracts, which automate processes, reduce human error, and enhance transparency, resulting in better returns for participants.
Another factor is the use of governance tokens as incentives. These tokens can appreciate significantly in value due to their scarcity and utility, creating a positive feedback loop that attracts more users and liquidity to the protocol.
However, high yields also come with high risks. Some of the common risks associated with DeFi yield farming include:
Smart contract bugs or exploits that can result in loss of funds
Impermanent loss that occurs when providing liquidity to volatile assets
Market volatility that can affect the price and demand of tokens
Regulatory uncertainty that can affect the legality and compliance of protocols
Therefore, it is important for users to conduct thorough research and due diligence before participating in any DeFi protocol.
What is real yield and why is it important?
Initially, DeFi protocols relied on unsustainable token emissions to fuel high returns, resulting in inflation and the creation of "useless governance tokens" with limited utility. However, this strategy proved unsustainable in the long run. Token demand often failed to keep up with emissions due to high inflation schedules and lack of utility, resulting in plummeting token prices.
Furthermore, many DeFi yield farmers lacked commitment to projects, constantly seeking the highest yield by switching between protocols. Additionally, farmers frequently sold their governance tokens immediately after earning them, focusing solely on securing short-term profits.
To address these challenges, the concept of real DeFi yield emerged. This approach emphasizes sustainable strategies that offer tangible and lasting returns. Rather than receiving newly minted tokens with uncertain value, users are rewarded with established cryptocurrencies like ETH.
This reduces concerns about token value and mitigates common risks associated with traditional DeFi yield farming. It also aligns the incentives of users and protocols better, encouraging long-term participation and loyalty.
Which DeFi protocols offer real yield?
There are several DeFi protocols that offer real yield to users who participate in their platforms. They include:
1. GMX: A decentralized perpetual trading platform that pays 100% of its trading fees to liquidity providers (LPs) in ETH.
2. Synthetix: A decentralized synthetic asset platform that pays staking rewards to SNX holders in ETH based on their contribution to the protocol's debt pool.
3. Dopex: A decentralized options protocol that pays rebates to option writers in ETH based on their risk exposure.
Conclusion
DeFi yield provides an opportunity for individuals to earn passive income and participate in the decentralized financial ecosystem. However, not all yields are created equal. Real yield offers a more sustainable and practical approach to yield farming, rewarding users with established cryptocurrencies like ETH.
It is important for users to conduct thorough research and understand the risks associated with each protocol before participating in DeFi yield farming.