DeFi Growth & Stablecoin Surge Most Bullish Crypto Development: DCG State of Crypto 2020 Survey

https://bitcoinexchangeguide.com/defi-growth-stablecoin-surge-most-bullish-crypto-development-dcg-state-of-crypto-2020-survey/

39% of the respondents that involve 150 portfolio companies see DeFi as the most bullish crypto development of 2020, as per the DCG Founders survey “State of Crypto 2020.”

The sector has seen immense growth in 2020 and continues to hit new highs; just today, a new record was set of $12.5 billion TVL.

The founders surveyed said notwithstanding the price of DeFi tokens, which have been tanking hard until very recently, “the protocol development and business growth of 2020 bodes well for the industry’s future.”

What has been the most bullish crypto industry development this year?
DCG Survey: What has been the most bullish crypto industry development this year?

DeFi is followed by “BTC resilience” and “Stablecoin surge,” which makes sense given that the market cap of fiat-backed crypto has shot up past $12 billion this year.

​“The growing demand for stablecoins in Latin America, and Argentina specifically, is due to the fact that buying dollars as a form of savings is a regular monthly habit for middle-class Argentinians, due to cyclical devaluations and loss of trust and credibility in the Argentinian peso,” said Sebastian Serrano, CEO of Ripio, an Argentinian digital asset exchange, and payments company.

​Still, respondents were split on whether Ethereum, which is the center of it, will remain the dominant transaction-based blockchain. 51% still believe the second largest network will find scalability faster than new blockchains develop a community.

Adoption Drivers & Greatest Risks

What macro development will have the greatest impact on digital currency adoption?
DCG Survey: What macro development will have the greatest impact on digital currency adoption?

Other findings of the survey revealed “global recession” (24%), “inflation” (19%), and “hunt for yield” (18%) as the main macro crypto adoption drivers. However, the smart money adoption won’t be bringing new highs for BTC price in the next 6-12 months as per the majority.

Only 20% think during this period, BTC will surpass $20,000.

Where do you think the BTC price will be in 6-12 months?
DCG Survey: Where do you think the BTC price will be in 6-12 months?

Meanwhile, nearly six in ten respondents expect industry consolidation, resulting from big players buying smaller ones to limit competition to accelerate, particularly in the exchange and wallets & custody spaces.

However, the industry’s greatest risk remains the same; compliance and regulation as per 51% of the respondents.

“It’s really important that we start to see some consistency and coordination across regions,” said Simone Maini, CEO of Elliptic, a blockchain forensics, and analysis company, “there are still plenty of opportunities for regulatory arbitrage at the moment, where businesses are trying to operate in jurisdictions with looser regulations.”

Other factors that impede sustainable growth involve theft/hacks/scams (22%), investment crunch (12%), and technical obstacles (8%).

Overall, in 2020, four in five rated their company’s performance against expectations as “outperformed” or “neutral” while having COVID/remote work, third party delays, and fundraising as the main business challenge.

The post DeFi Growth & Stablecoin Surge Most Bullish Crypto Development: DCG State of Crypto 2020 Survey first appeared on BitcoinExchangeGuide.

Ethereum Price Crash Causes ‘Extreme’ Network Congestion; Gas & DeFi Shot Up

https://bitcoinexchangeguide.com/ethereum-price-crash-causes-extreme-network-congestion-gas-defi-shot-up/

TLDR:

  • Ethereum price sees its biggest percentage drop ever
  • Borrowing demand for DAI is currently at record levels
  • ETH median gas price just spiked to the highest level it’s been in over 1 year
  • Ethereum network clogged while unconfirmed transactions rose because of this Binance increased ETH withdrawal fees by 100% and ERC20’s by 66%

Today’s crypto carnage saw the second-largest cryptocurrency losing 33 percent of its value and is currently trading at $141.44.

The price of Ether fell from about $200 to as low as $129, making it the biggest percentage drop in the digital asset’s price. Ever. And this has been on the back of substantial volume as currently, over a billion dollars worth of Ether are exchanging hands-on top ten exchanges with real volume.

This drop came amidst the broader market turmoil. For the first time since May, Bitcoin dropped to $5,700 level and the US stock market extended its losses on Thursday triggering yet again a trading halt within 10 minutes of the market opening.

The global markets are suffering because of the continued uncertainty and fear about the coronavirus (Covid-19) which has been declared a pandemic by the World Health Organization (WHO).

This black swan event, however, had a lot more complications for Ether besides just price.

Massive network congestion

The crash in Ether price resulted in the price of Gas, the computation power on the Ethereum network to shoot up. Measured in gwei, Gas prices went to 100, making the cost of sending basic transactions in the next block north of $0.30.

“Ethereum’s price drop has lead to massive network congestion. ETH median gas price just spiked to 29 gwei – the highest it’s been in over 1 year,” noted crypto analysis company Glassnode.

Source: @glassnode

Similar spikes in gas prices have been seen during bouts of volatility in the past as well.

Apart from the gas price, the Ethereum Network is also having a considerable backlog, clogging transactions for as much as an hour and more. As per Etherscan, unconfirmed transactions on the Ethereum network jumped to 120k today, for which reportedly ERC20-based Tether (USDT), which crypto exchange Binance disabled for a short amount of time and DAI liquidations are responsible.

To run things faster, Binance increased the ETH withdrawal fees by 100% and ERC20 withdrawal fee by 66%.

“To better facilitate ERC20 and ETH withdrawals during this period of high congestion on the ETH network, we are making the following temporary adjustments: ETH withdrawal 0.003 ETH is now 0.006 ETH. ERC20 withdrawal 0.006 ETH is now 0.01 ETH. Withdrawals will re-open shortly,” announced the exchange.

Liquidation issues

Another impact of this price crash has been on the Decentralized Finance products (DeFi). The decline in Ether price caused liquidations of DeFi derivatives trading and collateralized debt.

As the network is congested, it means it is taking time for the collateral to get liquidated. With a dominance of 58% in DeFi, it affected the Maker users. MakerDAO participants are advised to repay, pay back debt, or add more collateral to increase their ratio.

For automation users, DeFi Saver, a management solution for decentralized finance protocols said they “cannot provide any guarantees regarding outcomes” in a scenario where the price in a user’s MakerDao drops below their liquidation price.

Not just in bear markets but in booming periods as well, Ethereum Network has gotten congested.

One positive thing that happened during today’s bloodbath is an increment of 6.7% in the ETH locked in DeFi. It yet again jumped above 3 million, according to DeFi Pulse.