Three Altcoins to explore | DEX Tokens Rally, Whilst the Government Plans to Tighten Regulation
Bitcoin crashed twice last week, partly because of news reports on the Chinese government’s ban on crypto trading. At the beginning of the week, we saw a 10% drop in value when the Evergrande news hit the front pages from $45,000 Bitcoin dropped to $40,500. The Federal Reserve decision to keep interest near zero and Twitter supporting crypto payments on its Tips feature, helped Bitcoin to almost break $45,000. That’s when China made headlines again, announcing a further crackdown on Bitcoin. As a result, Bitcoin just dipped below $40,000 for the first time since early August. Ethereum followed suit last week and dropped from $3,180 to $2,711. Both cryptocurrencies bounced back at their starting positions at the beginning of last week on the day of writing, despite seeing a week dominated by red chart.
Crypto is being looked at by the SEC for being a security, with another concern being how to prevent money laundering through anonymous trading. Despite these concerns and the Treasury Department and other agencies trying to target stablecoins, we witnessed DEX tokens come to the center of attention last week. Quite a few DEX tokens managed to rally, despite the market being red.
A DEX is a Decentralized Exchange. It is a peer-to-peer marketplace, and transactions are made directly between crypto traders. The most popular DEXs, like UniSwap or SushiSwap, are built on the Ethereum blockchain. They are booming as part of the Decentralized Finance (DeFi) ecosystem. The first quarter of 2021 saw $217 billion in transactions on DEXs, with more than two million crypto traders. On a DEX, tradings are run on sets of smart contracts. You lock funds in a liquidity pool and in return, you receive yield or interest.
The pros of a DEX are that no KYC/AML or ID identification is required. A DEX is trustless, preserving user funds and privacy. Only a wallet address and payment details are needed for trading. In addition, transaction fees are usually low, and no middlemen are involved.
Cons of a DEX include security issues. Vulnerabilities in smart contracts can be exploited, resulting in loss of your investment. Liquidity can be an issue if not many users participate in regular trading, and transactions can take a long time before they are approved by the blockchain. Trading on a DEX is not user-friendly for newcomers in the crypto space.
Today we look at three DEX tokens that were leading the market last week during the overall price downturn, dYdX (DYDX), UniSwap (UNI), and Curve DAO token (CRV).
Notice: KuCoin does not provide financial advice. Please do your own risk assessment when deciding how to invest in cryptocurrency and blockchain technology.
dYdX is a decentralized exchange built on the Starkware layer 2 network. In contrast to a typical AMM (Automated Marker Maker), dYdX features an order book architecture. You can borrow, lend, and predict future prices on popular cryptocurrencies. dYdX offers other unusual DEX features, including spot trading, margin markets, and perpetual futures on multiple trading pairs. Thus, bringing trading tools normally found in fiat markets to the world of blockchain.
The DYDX token is a governance token which allows the dYdX community to truly govern the Layer 2 protocol. You can also earn discounts on trading fees within the platform if you hold DYDX. 50 billion tokens were unlocked on 8th September 2021, and the chart has been green ever since. The price of DYDX is up 37.5% during the last 24 hours.
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UniSwap (UNI) runs on the Ethereum blockchain and is a leading decentralized crypto exchange. UniSwap runs on two smart contracts. The ‘Exchange’ contract’ facilitates swapping or trading. The ‘Factory’ contract allows for new coins or tokens to be added to the platform. It is a unique, open-source protocol by which anyone can copy the code and create their own decentralized exchange. As a result, there are a lot of UniSwap clones in the blockchain world.
The UNI token was launched in September 2020 and is a governance token. This allows holders to vote how the protocol is run. Holders can also fund grants, partnerships, liquidity mining pools, and other proposals. During the last 24 hours, UNI is up 35%. Since the beginning of the year, the UNI token saw a 380% increase.
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Curve DAO token (CRV)
The Curve DAO token fuels the Curve Finance platform. Curve.fi is a decentralized exchange and automated market maker protocol for stablecoins. Since Curve only supports stablecoins, the risk of fast market movements is reduced. Curve offers low fees and slippage. By hosting pools of similar assets, impermanent loss is minimized. Instead of working with an orderbook, an AMM like Curve works with a pricing algorithm.
CRV is the governance token of Curve DAO. CRV tokens can be staked and locked for various times (up to four years) for voting to enable holders to participate in network governance. During the last 24 hours, Curve DAO token is up 25%.
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The future trend of the cryptocurrency market is potentially looking good. Every time the SEC or China increased pressure on Bitcoin, Bitcoin bounced back strongly. In general, the sentiment is going towards a strong end of the year for the crypto market.
There are also a couple of DEXs that are worthwhile keeping an eye out for. For instance, 1inch exchange and SushiSwap are popular and promising DEXs. Their respective tokens also saw a very sound uptrend during the end of last week that is worth attention for the future.
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