What's this Non-Fungible Token (NFTs) Craze All About, Anyway?
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Non-fungible tokens (NFTs) are unique, digital items with blockchain-managed ownership. Examples include collectibles, game items, digital art, event tickets, domain names, and even ownership records for physical assets.
Characteristics of Non-Fungible Tokens
- Rare – The value of NFTs comes from their scarcity. Although NFT developers can create any amount of non-fungible tokens, they often limit the tokens to increase rarity.
- Indivisible – Although not set in stone, most non-fungible tokens are indivisible into smaller units. You either purchase the entire amount of, say, a digital art piece, or purchase no art at all.
- Unique – This is perhaps the most significant characteristic of them all. NFTs have a permanent information tab that records their uniqueness. Think of this information as a certificate of authenticity.
Fungible vs. non‑fungible
It’s Easy!
'Fungibility' sounds complicated — but it’s really a very simple concept that relates to the things we own and use everyday. It applies to real-world assets as well as digital ones.
The dollar in your pocket — or the Bitcoin in your crypto wallet — is a prime example of a fungible asset. Both are easily replaced by something that is (for all intents and purposes) identical.
If Bob lends Kate $10, he wouldn’t need to receive exactly the same banknote back, because they’re equally as valuable.
Unlike Bitcoin, which has a supply of 21 million identical coins, NFTs have individual characteristics which represents something unique. Example: properties, event tickets.
What can a NFT represent?
- Crypto collectibles like crypto Kitties
- Digital artwork
- A ticket to an event
- An in-game item
- An item in a virtual universe
- A real-world asset
Exciting use cases for non‑fungible tokens (NFTs) are cropping up all the time — and they’re even being touted as the future of the gaming industry, the art industry, and even in some cases the real estate business!
NFTs can also command serious cash, with some selling for hundreds of thousands of dollars.
Total Crypto Art Value: $122,955,057.42 (79,485.841 ETH)
Total Artworks Sold: 80,571
Top NFT Projects
Since the NFT subspace is growing exponentially, NFT-focused products and projects have also increased. They range from gaming networks to NTF marketplaces. Below are five of the top NFT projects today.
' Get a chance to win the NFTbox worth 3 ETH for free by grabbing the limited UFO NFT PINATA EDITION 3
Step-by-Step Guide to stake in Ethereum 2.0 Mainet
The staking contract is open and Eth2 is set to go live on December 1st, 2020. This is years of work finally coming to fruition. And it’s safe to say we’re excited.
That’s why we’re launching this ETH staking guide for those looking to run a validator node on Mainnet.
But now it’s game time. This is the real deal.
Think of staking as security-as-a-service incentivized by yield
Staking on Ethereum will be fairly simple. The steps are:
You have ETH 💰
You deposit ETH into the staking contract 👨💻
You run staking software honestly ☑️
You earn more ETH (yay!) 💵
Please join the Telegram group to get updates and help. We hope it serves as an invaluable resource for the Ethereum community on getting started with Eth2. 👏
🙏Aave—earn high yields on deposits & borrow at the best possible rate!
We dropped a special episode of ALPHA LEAK on ETH2 and ETH staking!
Learn everything you need to know on Eth2 staking with Preston Van Loon!
Here’s what this guide covers:
Recommended hardware
Choosing & Installing Your Client
Setting up an Eth1 Node
Using the Eth2 Launch Pad
Bonus content and resources
Make sure to run some tests before you get started! To test your setup on the Medella testnet first please see here.
Below you will find some hardware recommendations, resource links, and some useful guides to get you prepared.
Recommended Specs:
Operating System: 64-bit Linux, Mac OS X, Windows
Processor: Intel Core i7-4770 or AMD FX-8310 (or better)
Memory: 8GB RAM
Storage: 100GB available space SSD
Internet: Broadband internet connection (10 Mbps)
Power: Uninterruptible power supply (UPS)
Digital Ocean Equivalent (cloud provider):
Memory: 8GB RAM
Storage: 160GB available space SSD
Uptime: 99.99%
Availability: 8 Data Centers
$/HR: $0.060
$/MO: $40
Hardware Equivalent:
Minimum Requirements:
Operating System: 64-bit Linux, Mac OS X, Windows
Processor: Intel Core i5-760 or AMD FX-8110 (or better)
Memory: 4GB RAM
Storage: 20GB available space SSD
Internet: Broadband internet connection (10 Mbps)
Power: Uninterruptible power supply (UPS)
Digital Ocean Equivalent:
Memory: 4GB RAM
Storage: 80GB available space SSD
Uptime: 99.99%
Availability: 8 Data Centers
$/HR: $0.030
$/MO: $20
Hardware Equivalent:
this article is being updated...
Lossless Lottery PoolTogether
PoolTogether is the world’s first no-loss savings game. The application allows users to pool their Dai with other players to accrue interest via DeFi’s various saving opportunities. The interest earned on the capital pool is collected into a common pool and distributed as a prize to one winner each week.
For every 1 Dai deposited a player gets 1 ticket. The average prize is currently sitting around $150 with the capital pool growing daily.
What’s even more interesting is that out of the $233k currently in the pool, roughly 65% of the Dai is “sponsored” – meaning that those tickets can not be chosen as a winner. As a result, the remaining 35% of eligible Dai is competing for 100% of the pool’s interest!
Step 1: GET TICKETS
Deposit into any prize pool and instantly get tickets. Receive 1 ticket for every $1 deposited.
Step 2: WIN PRIZES
As long as your money is deposited you're eligible to win prizes. Prizes are made up of the interest earned on all deposited money in the pool
Step 3: NEVER LOSE
Remove your deposit at anytime. As long as you stay in the pools you continue to be eligible to win.
Ethereum 2.0 (Serenity) Phases
Introduction
Ethereum’s Serenity upgrade will bring Sharding, Proof of Stake, a new virtual machine (eWASM) and more. It’s important to understand that this upgrade will not take place at a single point in time – instead, it will be rolled out in phases. This document attempts to be a reference point for these phases and what each includes.
To start, here is a nice visual from Ethereum researcher Hsiao-Wei Wang on what the different layers and phases look like.
Design Goals
Ethereum researcher Danny Ryan has stipulated 5 distinct design goals for Ethereum 2.0:
- Decentralization: to allow for a typical consumer laptop with O(C) resources to process/validate O(1) shards (including any system level validation such as the beacon chain).
- Resilience: to remain live through major network partitions and when very large portions of nodes go offline.
- Security: to utilize crypto and design techniques that allow for a large participation of validators in total and per unit time.
- Simplicity: to minimize complexity, even at the cost of some losses in efficiency.
- Longevity: to select all components such that they are either quantum secure or can be easily swapped out for quantum secure counterparts when available.
Phase 0 – Beacon Chain (~Late 2019)
What is included?
Phase 0 is the name given to the launch of the Beacon Chain. The Beacon Chain will manage the Casper Proof of Stake protocol for itself and all of the shard chains. As Ben Edgington puts it, “There are a number of aspects to this: managing validators and their stakes; nominating the chosen block proposer for each shard at each step; organizing validators into committees to vote on the proposed blocks; applying the consensus rules; applying rewards and penalties to validators; and, being an anchor point on which the shards register their states to facilitate cross-shard transactions.”
The primary source of load on the Beacon CHain will be “attestations”. Attestations are availability votes for a shard block and, simultaneously, proof of stake votes for a beacon block. A sufficient number of attestations for the same shard block will create a “crosslink” which confirms the shard segment up to that shard block into the Beacon Chain.
Phase 0 will use Casper the Friendly Finality Gadget (FFG) for finality. Finality, in very loose terms, means that once a particular operation has been done, it will forever be etched in history and nothing can revert that operation.
ETH2:The New Ether
Phase 0 will introduce ETH2 which will be a new asset for stakers (validators) to be used on Beacon Chain. It will be created by two methods:
- As a reward for validating the Beacon Chain (and shards after phase1).
- Purchasing it for 1 ETH by any ETH1.X user via an registration contract. The contract refers to it as deposit.
There is currently no way to withdraw ETH2 from the beacon chain in Phase 0. Once deposited in the ETH1.x validator registration contract, the ETH1 is effectively burned. Beacon Chain validators watch this contract and submit deposit information to the Beacon Chain, which then issues ETH2 to the depositors.
Lastly, the Beacon Chain will generate good quality (distributed, verifiable, unpredictable, and (reasonably) unbiasable) randomness for the rest of the system. It will use RANDAO which is simply a way to combine contributions (individual random numbers) provided by many participants into a single output number.
This will be used to organize validators into block proposers and committees.
What will the network look like?
Once Phase 0 is complete, there will be two active Ethereum chains. For the sake of clarity let’s call them the Eth 1.0 chain (current, PoW main chain) and the Eth 2.0 chain (new Beacon Chain). During this phase, users will be able to migrate their ETH from the Eth 1.0 chain to the Eth 2.0 chain and become validators. However, they will NOT be able to migrate this ETH back. The reason someone may want to do this is that they could be earning interest paid in ETH on the Eth 2.0 chain.
In order to run the Beacon Chain you’re going to need a Beacon Chain client. These are currently being developed separately from the familiar suite of standard Ethereum clients (Geth, Parity, Pantheon, et al.) by a number of teams. Prysmatic and Lighthouse are putting out periodic updates on their client development progress, and some of the teams are offering bounties to contributors to include more and more developers in building 2.0. You can contribute on Gitcoin grants here
On its own, the Beacon Chain might not seem particularly useful. But, as the first component of Ethereum 2.0 to be delivered, it is the foundation of the entire system.
Important Considerations
- ETH2 is transferable to and from shards once Phase 2 is complete.
- There will be a minimum amount of ETH stake needed in order to first bootstrap the beacon chain. This is defined as
CHAIN_START_FULL_DEPOSIT_THRESHOLDin the deposit contract that will live on the Eth 1.0 chain. Currently, this is set to 16384 validators needed. That would mean 524,288 ETH in total stake is needed. This would pay ~11% interest to stakers. - To become a validator, you’ll need to stake 32 ETH2.
- During Phase 0, all user transactions and smart contract computations will still occur on the Eth 1.0 chain.
Phase 1 – Shard Chains
What is included?
Shard chains are the key to future scalability as they allow parallel transaction throughput.
Phase 1 is primarily concerned with the construction, validity, and consensus on the data of these shard chains. Phase 1 does not specify shard chain state execution or account balances. It’ll be like a trial run for the sharding structure rather than an attempt to use shards to scale. The Beacon Chain will treat shard chain blocks as simple collections of bits with no structure or meaning.
Crosslinks
Periodically, the current state (the “combined data root”) of each shard gets recorded in a Beacon Chain block as a crosslink. When the Beacon Chain block has been finalised, the corresponding shard block is considered finalised, and other shards know that they can rely on it for cross-shard transactions.
Crosslinks are a set of signatures from a committee attesting to a block in a shard chain, which can be included into the Beacon Chain. Crosslinks are the main means by which the Beacon Chain “learns about” the updated state of shard chains. Crosslinks also serve as infrastructure for asynchronous cross-shard communication.
Shard validators, who are randomly selected by the Beacon Chain for each shard at each slot, merely come to agreement on each block’s content. They attest to the shard’s contents and state through crosslinking. It doesn’t matter what information appears in shards blocks, so long as all committees reach consensus and update the Beacon Chain on the shard regularly.
What will the network look like?
The Eth 1.0 and 2.0 chains will still operate in parallel after Phase 1.
Important Considerations
- In Phase 0, 1, and 2 the main PoW chain (Eth 1.0) will remain live while testing and transitioning is happening on the Eth 2.0 chain. This means that rewards will be paid to both Ethereum 2.0 validators as well as the normal PoW block rewards. Therefore, the combined inflation of the 2 chains may spike initially but then start to trend towards the 0-1% range as the PoW chain is gradually deemphasized.
Phase 2 – State Execution
What is included?
Phase 2 is where the functionality will start to come together. Shard chains transition from simple data containers to a structured chain state and Smart Contracts will be reintroduced. Each shard will manage a virtual machine based on eWASM. It’ll support accounts, contracts, state, and other abstractions that we’re familiar with from solidity. We can expect familiar tools like truffle, solc, ganache ported to support eWASM before or during phase 2.
State Rent is also a very likely inclusion for Phase 2 and it poses challenges to developers. Rather than being able to store code and data indefinitely, state rent would require contract developers and users to pay for eWASM storage over time. This ensures that unused information falls out of the state over time.
Currently, not much information is available about this phase and whatever is available is almmost certainly going to change over time.
Important Considerations
- A dApp will have to choose what shard it wants to be on. That decision matters because “Cross-shard communication will definitely be slow at base layer, however there are higher-level mechanisms that can be used to implement fast cross-shard communication on top of a base layer that allows any cross-shard communication at all even if slow,” according to Vitalik Buterin.
- A dApp would have to be really big to consume all the resources in a given shard to justify spreading itself over multiple ones.
- This phase will endow shards with eWASM as the EVM 2.0.
- It is an open question when and how Ethereum 1.0 accounts and contracts will be migrated to Ethereum 2.0, there are some upgrade plans
What’s next ?
The sharding roadmap according to the official wiki suggests 6 phases. Justin Drake strongly believes that the sharding phases 1 and 2 will come in 2020 and 2021, respectively (assuming that the Beacon Chain launches in 2019).
From Phase 3 onwards any speculation made is subjected to change, you can go and check out wiki for further phase’s information.
Beginner’s Guide to DeFi (Decentralized Finance)
Imagine a global, open alternative to every financial service you use today — savings, loans, trading, insurance and more — accessible to anyone in the world with a smartphone and internet connection.
This is now possible on smart contract blockchains, like Ethereum. “Smart contracts” are programs running on the blockchain that can execute automatically when certain conditions are met. These smart contracts enable developers to build far more sophisticated functionality than simply sending and receiving cryptocurrency. These programs are what we now call decentralized apps, or dapps.
You can think of a dapp as an app that is built on decentralized technology, rather than being built and controlled by a single, centralized entity or company. (Get used to this word, dapp, you’ll be seeing it a lot from here on out.)
While some of these concepts might sound futuristic–automated loans negotiated directly between two strangers in different parts of the world, without a bank in the middle– many of these dapps are already live today. There are DeFi dapps that allow you to create stablecoins (cryptocurrency whose value is pegged to the US dollar), lend out money and earn interest on your crypto, take out a loan, exchange one asset for another, go long or short assets, and implement automated, advanced investment strategies.
What differentiates these DeFi dapps from their traditional bank or Wall Street counterparts?
- At their core, the operations of these businesses are not managed by an institution and its employees — instead the rules are written in code (or smart contract, as mentioned above). Once the smart contract is deployed to the blockchain, DeFi dapps can run themselves with little to no human intervention (although in practice developers often do maintain the dapps with upgrades or bug fixes).
- The code is transparent on the blockchain for anyone to audit. This builds a different kind of trust with users, because anyone has the opportunity to understand the contract’s functionality or find bugs. All transaction activity is also public for anyone to view. While this may raise privacy questions, transactions are pseudonymous by default, i.e. not tied directly to your real-life identity.
- Dapps are designed to be global from day one — Whether you’re in Texas or Tanzania, you have access to the same DeFi services and networks. Of course, local regulations may apply but, technically speaking, most DeFi apps are available to anyone with an internet connection.
- “Permissionless” to create, “permissionless” to participate — anyone can create DeFi apps, and anyone can use them. Unlike finance today, there are no gatekeepers or accounts with lengthy forms. Users interact directly with the smart contracts from their crypto wallets.
- Flexible user experience — don’t like the interface to a certain dapp? No problem — you can use a third party interface, or build your own. Smart contracts are like an open API that anyone can build an app for.
- Interoperable — new DeFi applications can be built or composed by combining other DeFi products like Lego pieces — e.g. stablecoins, decentralized exchanges, and prediction markets can be combined to form entirely new products.
DeFi is now one of the fastest growing sectors in crypto. Industry observers measure traction with a unique new metric — “ETH locked in DeFi”. At the time of writing, users have deposited over $1.72B million worth of crypto into these smart contracts.
Popular DeFi Dapps
1.) Aave
Aave is an Open Source and Non-Custodial protocol to earn interest on deposits & borrow assets.
Aave is an open source and non-custodial protocol enabling the creation of money markets. Users can earn interest on deposits and borrow assets.
2.) Compound
Compound is an open-source, autonomous protocol built for developers, enable algorithmic, efficient money markets on the Ethereum.
3.) NUO
NUO Network is a decentralised debt marketplace that connects lenders and borrowers using smart contracts.
Recent Posts
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What's this Non-Fungible Token (NFTs) Craze All About, Anyway?
24 Feb, 2021 -
Step-by-Step Guide to stake in Ethereum 2.0 Mainet
24 Nov, 2020 -
Lossless Lottery PoolTogether
28 Oct, 2020 -
Ethereum 2.0 (Serenity) Phases
3 Jul, 2020 -
Ethereum 2.0 (Serenity) Phases
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Beginner’s Guide to DeFi (Decentralized Finance)
25 Jun, 2020
