Ranked among the UFC’s top lightweight fighters, “Money” Moicano brings the same fearless, no-holds-barred mentality to both fighting and finance, weaving sharp commentary on money, government, and personal freedom into his post-fight interviews.

Just three days after his recent title fight, Moicano sat down with CoinCentral’s Alex Moskov to dive deeper into the man behind the fighter, the Austrian economics and Bitcoin advocate, and the tri-lingual host of the Show Me the Money podcast. 

Renato Moicano’s Rising Star and Economic Commentary

Many UFC fighters have had hot streaks, but not many are like Renato Moicano. Fresh off finishing Jalin Turner as a +200 underdog, Moicano’s MMA-gloved hands seized the mic, using Joe Rogan’s extended arm as a microphone stand. 

Adrenaline flowing, the Brazilian-born Moicano launched into a full-throttle tirade, weaving pro-America advocacy of personal freedom, fiscal responsibility, and Ludwig von Mises’ six lessons of Austrian economics into a sermon for 20,000 roaring fans.

 “And let me tell you something, if you care about your own f***ing country, Ludwig von Mises and the six lessons of the Austrian economic school, motherf***ers.”

These lessons—drawn from a series of Mises’ lectures in Argentina in 1959—champion free markets, warn of inflation’s destructive grip, and argue against the creeping hand of socialism, all while underscoring the perils of government meddling in the economy.

If anyone thought Moicano’s post-fight monologues were a one-off, they were sorely mistaken. 

His performance and the viral reception earned him a headline spot on UFC Fight Night in Paris on September 28, 2024, against the tough Benoit St. Denis. 

St. Denis, a former French Army Special Forces operative, looked at the lightweight division as just another battlefield. Moicano, again a +200 underdog against the home-crowd favorite, systematically dismantled St. Denis in the first round, forcing a doctor’s stoppage after the first round. 

Then came the mic. 

Rather than bask in victory or play the villain role that often comes with spoiling a hometown hero’s night, Moicano turned his sights on Macron, the French government, and global political agendas.

“People in France don’t suck, but the government is f*cking horrendous!” 

Audience boos turned into cheers after the translator relayed his comments. 

Moicano doubled down. 

“F*ck Macron, f*ck all globalilists, they’re trying to push a political and corrupt agenda!” 

He also assigned some homework: Hans-Hermann Hoppe’s Democracy: The God That Failed, a book that explores voter behavior, policy-making, and institutional reforms, and how global changes, inequality, and technological advancements have forced democratic evolution in recent years.

Renato left to roaring applause. The man knows how to cut a promo, but showmanship aside, Money Moicano is a level-headed first-principles thinker regarding his money. 

He’s also completely self-taught. He began teaching himself English at 29 and is entirely self-directed in his knowledge of economics and cryptography. 

“When I moved to the USA in 2018, Trump was in office, and in Brazil we had Bolsonaro,” says Moicano. “Everybody was talking about how democracy was in danger because of these ‘populist’ leaders. So I asked myself, ‘What is democracy?’ I knew you go vote, but what does it really mean? I started reading about the Roman Empire, about Greece, how political systems were created.”

Watching global reactions to Trump and Bolsonaro’s rise was his political awakening—not in the tribal, surface-level way most people experience politics, but in a way that led him down the rabbit hole of governance, money, and ultimately, decentralized finance and Bitcoin. 

Bitcoin, which famously has no politics because it’s pure programming and math, often requires a deeper political understanding to realize its utility.

“In 2021, everybody in the gym was talking about Bitcoin,” says Moicano. “I’d already been investing in stocks, so I bought some Bitcoin. Then it went up, then it crashed, and I started to worry, but I didn’t sell. That’s when I read Bitcoin Red Pill, and it talked about Austrian economics. After that, I started reading all these books about the moral and philosophical side of Bitcoin, and everything made sense.”

His conviction deepened in the 2022 bear market. While others panic-sold, he kept learning and connecting big-picture economic themes like inflation, government overreach, moral hazard to personal freedom, and the reality of his own lived experience. 

“I also bought some crypto games– I lost a lot of money on these fucking NFTs in crypto games,” Moicano adds.

Been there.

Moicano’s journey mirrors that of many of Bitcoin’s most die-hard supporters—not just those who read about inflation, government overreach, and systemic manipulation, but those who’ve felt its impact firsthand. The early Bitcoin movement was born from the wreckage of the 2008 financial crisis, a direct response to reckless monetary policy, bailouts for the powerful, and the slow siphoning of wealth from the many to the few. 

Like many Bitcoiners, for Moicano, Bitcoin is a form of self-defense and a safeguard against a rigged system. 

His post-fight interview coverage runs the gauntlet– belts, bonuses, gratitudes, callouts, financial literacy, and democracy, and has attracted a loyal fan base that goes beyond his Octagon performance. 

His performance in Paris earned him a spot on the UFC 311 card on January 18, 2025. Initially set to face a different opponent—one he’d spent an entire training camp preparing for—fate had other plans. A whirlwind series of events led to Moicano being asked, last minute, to step in for a shot at the UFC Lightweight Championship.

The fight didn’t go his way, but Moicano left the cage with minimal damage to both body and spirit, using his post-fight mic time to give the champion Islam Makhachev the credit he deserved.

Moicano revealed he had something else in mind for that moment on Twitter. 

I wish I had won yesterday, grabbed the microphone, and told you to read Murray Rothbard’s What Has Government Done to Our Money! Why money should be a commodity with a floating price dictated by the free market! Why central banks are institutions that, instead of helping the…

— Renato Moicano (@moicanoufc) January 19, 2025

So, we sat down for an interview to discuss. 

Renato Moicano on Bitcoin and “Proof of Work”

Fighting and philosophy share roots stretching back millennia. To the ancients, a true philosopher was no mere armchair theorist. Plato, whose nickname means “broad-shouldered,” wrestled. Socrates and Marcus Aurelius championed physical training as a key to mental clarity and moral virtue.

They believed moral and intellectual insight required discipline honed in the mind and body. This dual commitment to wisdom and justice once defined the archetype of the “philosopher king,” a ruler who wielded thought and action with equal mastery.

Yet over the centuries, that vision has faded in favor of more disembodied, specialized academic pursuits. 

With all due respect to many of the brilliant minds of recent history, today’s thinkers are mostly behind lecterns or on digital platforms, rarely stepping into spaces that test their physical resolve. As a result, they miss out on the invaluable feedback loop that comes from direct physical engagement with the real world—the kind that sharpens intellect and instinct. 

Echo chambers of “experts” without skin in the game or real-world experience have exercised a grip on communications channels, each biased in one political direction or the other. 

That’s not to suggest the world’s problems would be solved if economics just began deadlifting, like The Black Swan and Antifragile mathematician writer Nassim Nicholas Taleb, or if captains of industry began training jiujitsu, like Mark Zuckerberg. 

But there’s something to be said for clarity, resilience, real-world adaptability, and critical refinement of effort forged in both the gym and the arena.

“Most people live in an abstract mindset where everything’s relative, but get out there and train,” says Moicano. “Do something that reminds you that you’re human. Do something meaningful with your life—and if you can make money, buy Bitcoin, study Bitcoin, and let people know you’re doing it.”

While modern thought has produced staggering advancements, cracks emerge where theory collides with reality– take our impossibly complex economy, labyrinthine monetary policies that even their stewards cannot fully understand, and the perennial question of what it truly means to govern justly. 

The tides, however, seem to be shifting. Joe Rogan, Lex Fridman, and Jocko Willink—whose combined audiences reach hundreds of millions each month—are all black belts in Brazilian Jiu-Jitsu, as is Renato Moicano. Eddie Bravo, another black belt and frequent Rogan guest, pioneered 10th Planet Jiu-Jitsu and is widely credited with popularizing a new wave of grappling in America– we’ll explore this point later on. 

“I’m a huge fan of guys like Joe Rogan, Lex Fridman, and podcasting because you can have really long conversations and explain your point in a long format. That was how I learned English, too, because when I got in the USA, I didn’t speak English at all. I was watching podcasts and tried to figure out what they were saying. So, maybe I was influenced by that, you know, but I think the pursuit of truth is the most important thing in life.”

None of them claim to have all the answers. Their podcasts are less about definitive conclusions and more about pursuing truth, wherever it may lead, regardless of what feathers it may ruffle. 

Moicano and I discussed the unique place fighting has in thought and the insights that emerge where intellect and action collide. 

“Martial arts, like Bitcoin, is proof of work,” says Moicano. “You have to test yourself. You have to train, show up, and compete; nothing is guaranteed. Not only martial arts, but every sport. If you want to be a champion, you have to compete. To compete, you have to train. It’s not guaranteed. Only the best gets the prize. You know, you’re going to try against other machines per-se, right? It’s like mining– whoever is the best, faster, will get the prize. It’s a lot like the Bitcoin network.”

For Moicano, proof of work is a way of life, not just a consensus mechanism. His comparison between Bitcoin’s mining process and the demands of real-world competition offers a fascinating parallel for crypto enthusiasts.

Bitcoin’s proof-of-work system has long been criticized within the cryptocurrency space for its speed, lack of interoperability, and inability to be “smart” like Ethereum’s smart-contract-friendly network. 

Yet, it remains the undisputed champion for a reason. Winning, as it turns out, is incredibly energy-intensive, and there’s no way around it– at least not an indefinite way.

While other blockchains rely on proof-of-stake and models entangled in inflationary emissions, governance complexities, and buyback incentives, Bitcoin is brutally simple: machines compete, the first to solve the problem wins, and the fastest and most efficient are rewarded. 

Today, this race isn’t just between individual miners but entire industrial-scale mining farms, all vying for the block reward—currently 3.125 BTC, or roughly $325,000.

Sound Money Moicano on the Pursuit of Truth and Personal Challenge

Moicano’s pro-Bitcoin and financial literacy commentary is something of an anomaly in the entertainment world, where celebrities, fighters, and now politicians, will use moments of fame and attention to peddle shitcoins. 

After spending time with Moicano, it’s clear that’s not his game. There’s no Money Moicano Solana memecoin, no Show Me the Money NFT collection—at least, not any officially affiliated with him that we know of. 

“People ask me, ‘Moicano, when should I buy Bitcoin?’ And I always tell them, ‘Don’t buy if you don’t want to study.’ Because if you buy just because the price is going up, you’ll sell when it goes down. You have to do the work.”

There’s a shared ethos of no shortcuts, no illusions.

“If you try to follow the truth and you’re true to yourself, you’re going to get to good places in life because only the truth can set you free,” says Moicano. “I think Bitcoin is like the truth economically– the truth of money.”

His choice of words—“only the truth can set you free”—underscores a moral dimension to holding sound money, further highlighting the integration of his learned experiences into a personal heuristic. 

Moicano, it turns out, is what the cryptocurrency world calls a Bitcoin maximalist. 

In crypto circles, that’s a line-in-the-sand declaration: Bitcoin is king, and everything else is just a distraction, a scam, or an elaborate Ponzi scheme with no fundamentals.

No proof of work! No mining ! Billions of tokens! Totally centralized! A company literally have all the supply! Hijack the blockchain technology to use for banks and legacy system! The last thing that I would care about bitcoin is the price!! https://t.co/6maIHfQPbw

— Renato Moicano (@moicanoufc) January 24, 2025

When it comes to his money, he’s a first-principles thinker, demanding the same clarity and excellence in performance that is demanded of him in mastering his craft. 

Shifting gears, the rise of Brazilian Jiu-Jitsu in the U.S. has swept up a surprising demographic: startup founders, tech workers, and brain-heavy professionals who spend their days behind laptops and their evenings fighting for underhooks. 

It’s a sight to behold—120-pound purple belt developers effortlessly choking out 215-pound muscle-bound cop white belts, leveraged technique humbling brute strength in real-time.

The sport has exploded in popularity, with Google search trends peaking in 2023. 

Unlike boxing or Muay Thai, BJJ doesn’t require you to eat punches for breakfast—making it a natural draw for those who rely on their brains as much as their bodies. Famously, Mark Zuckerberg joined the fold, recruiting many of the world’s best grapplers and fighters for one-on-ones. 

But there’s another, more elusive thread running through BJJ’s rise—one that connects unlikely groups like crypto diehards, startup founders, and martial artists to a broader shift in how people engage with reality, risk, and politics.

The throughline isn’t immediately obvious, but Moicano’s journey offers some clues.

Fighting forces you to face reality in a way few other pursuits do. There’s no faking it on the mats. Mistakes have immediate consequences—you either adapt or you tap. This kind of visceral, real-time feedback rewires how you think, cutting through abstraction and exposing uncomfortable truths. 

It’s the exact opposite of modern politics, where bad policies don’t always have clear, immediate repercussions—until they do. 

Your generation might not even feel the effects, creating an intergenerational debt-fueled relay race. Every generation passes the burden to the next, hoping they won’t be the one collapsing at the finish line—assuming there’s even a next generation to pass the burden to, given plummeting birth rates and the growing trend of opting out of parenthood altogether. 

“Once you see the financial system is messed up, once you see democracy can be a fallacy, you can’t unsee it. People want free stuff, and the government wants to be elected, so they promise free stuff. That drives inflation, taxation, and more control. The state always wants to grow, so we’re not safe. We have to secure our assets in a hard, sound money that can’t be inflated or seized.”

And you don’t need a math PhD to see where this is headed: a society with longer life expectancy and fewer young people to support an aging population is an economic time bomb. 

Government programs that support the social safety net rely on the next generation to pay the bills. However, as national debt skyrockets and interest payments eat away at budgets, those programs look increasingly fragile.

So what’s the way out? Either a society that’s already sprinting just to stay afloat has to become somehow even more productive, boosting GDP at an unprecedented rate… or something fundamental has to change.

Moicano emerged as an outspoken critic of modern economic policies, particularly the inflationary spiral eroding the middle class. 

“I’m 35 years old, I’ve been working since I am 11,” says Moicano. “I just lose money all the time to inflation. If you have the right mentality, if you don’t gamble, if you don’t drink, if you don’t spend money on parties, if you do everything right, and you keep your money on the bank, you’re still losing, you’re still losing in life, the government is still robbing you. And I got sick fo that. I don’t want the government stealing my money through taxation and inflation. I don’t want a government taking my money and putting it into stuff that I don’t believe in.”

He warns that unchecked money printing isn’t just bad policy; it’s a wrecking ball for economic stability, widening the wealth gap and consolidating power in the hands of a few.

“I can become UFC champion. And if I don’t invest my money, if I don’t know money, I’m going to lose to inflation, so what’s even the point of working? And if you live in a society that doesn’t see value in storing money, we’ll become a bunch of lazy motherfuckers that don’t want to work. That’s why I keep trying understand and self educate myself, because I don’t want to lose. I have a family. I want to understand how the, how the world works. I’m always on the pursuit of the truth, beauty, and morality. I believe in right and wrong, and I always want to do right.”

His frustration with government overreach, national debt, and inflation mirrors the sentiments of libertarians, Austrian economists, and Bitcoiners alike. 

“It’s going to get worse for the middle class. The super-rich don’t pay taxes; the poor people don’t pay. So the government wants the middle class to foot the bill for everything. They want people poor so those people vote for more handouts, keeping politicians in power.”

He sees inflation and reckless spending as a form of generational theft—one that hits young and working-class families the hardest, often before they even realize what’s happening. 

Moicano draws a direct line between centralized power and its true lifeblood: a populace that feels powerless and is conditioned to believe that their only option is to beg for more state intervention. 

It’s a cycle straight out of the political playbook—one that both leftists and rightists wield masterfully, keeping citizens dependent while consolidating control.

“Why does the government get to enslave the next generation with debt? That’s why young people can’t afford homes—prices are going crazy. And politicians love it because they give handouts to get votes. That’s not capitalism; that’s interventionism. The state always wants to overreach.”

This message naturally resonates with Bitcoin advocates worldwide, but Moicano’s fighting talents have helped it reach an audience that might know Bitcoin by name but not by ideology. For Moicano, financial self-defense is just as critical as physical self-defense.

“Bitcoin has no top because fiat currency has no bottom,” Moicano declares. “The system is broken. The only ‘solution’ governments have is to print more money. Eventually, people will realize bonds aren’t that good, fiat isn’t that stable. America today is still okay, but 10, 20 years from now, it could be like Brazil—a tiny group of super-rich and a massive class of super-poor.”

Inflation, government overreach, reckless debt policies—these all operate in the background, dull and theoretical, until suddenly, a loaf of bread costs ten bucks, and no one can afford rent, let alone a home.

Moicano’s story shows how physical mastery often parallel intellectual courage. He didn’t arrive at Austrian economics and Bitcoin through a finance degree—he fought his way there, quite literally, accumulating Bitcoin with money earned fighting.

In his mind, the defense doesn’t stop at protecting your body; it extends to defending your financial future and recognizing when the system is rigged against you.

The post Renato Moicano on Bitcoin, Fighting, and Money’s Harsh Truths appeared first on CoinCentral.

Developed by Mysten Labs, it differentiates itself with parallel execution, an object-centric model, and the Move programming language. The goal isn’t just theoretical scalability; it’s proving that blockchain performance can track with real-world demand.  

Mysten Labs was founded in 2021 by ex-engineers from Meta’s now-defunct Diem blockchain initiative. CTO Sam Blackshear created Move, CEO Evan Cheng led engineering teams at Meta and Apple, and CPO Adeniyi Abiodun worked on Novi, Meta’s crypto wallet.

This background gives Sui an institutional pedigree, but it also has to prove it isn’t just another overhyped corporate-backed experiment.  

Sui has attracted serious investment, raising $336 million from firms like Andreessen Horowitz (a16z), FTX Ventures, Jump Crypto, Binance Labs, and Coinbase Ventures. This puts it in the same funding league as Ethereum and Solana in their early days, with backers betting that Sui’s infrastructure can support high-frequency financial and gaming applications.  

Launched in May 2023, Sui quickly built momentum, surpassing $1 billion in total value locked (TVL) by 2024. With zero reported network outages and an architecture designed for high-speed execution, Sui is positioning itself as a competitor to Solana. 

The real question is whether it can sustain adoption beyond the initial surge of speculation.  Competition is fierce. Solana dominates the high-performance Layer 1 category, and Aptos—another blockchain built by ex-Meta engineers using Move—offers a similar pitch. 

Whether Sui can differentiate itself over the long term will depend on developer traction, security resilience, and actual user adoption rather than just hype cycles.  

Let’s explore how Sui works and what the $SUI token is used for. 

Sui’s Technical Architecture & Innovation  

Sui’s defining feature is its parallel execution model, which aims to eliminate the congestion that plagues blockchains operating sequentially. 

Instead of processing transactions in a linear block structure, Sui’s object-centric approach allows independent transactions to finalize simultaneously. This is great in theory, but in practice, efficiency boils down to real-world developer implementation and network conditions.  

The blockchain runs on a Delegated Proof-of-Stake (DPoS) system, incorporating a Directed Acyclic Graph (DAG) to streamline data flow. Validators—who confirm transactions—are selected based on staked SUI tokens. This boosts throughput while maintaining decentralization, though like all DPoS models, there’s an ever-present risk of validator centralization if staking power concentrates in a few hands. 

Sui’s use of the Move programming language is another advantage. Originally built for Meta’s Diem, Move is designed to reduce security risks in smart contracts. Its resource-oriented approach prevents asset duplication or unintended loss—critical for financial transactions and NFTs—making it a potential upgrade over Solidity. 

Of course, Move’s adoption still trails far behind Ethereum’s Solidity, meaning developer migration isn’t guaranteed.  

Another key component of Sui’s architecture is the Narwhal and Bullshark consensus mechanism. Narwhal acts as a mempool, ensuring smooth transaction batching, while Bullshark handles sequencing within the DAG. 

This setup theoretically enables 125,000 transactions per second (TPS) under ideal conditions—but “ideal” and “real-world” are two very different things. Until Sui undergoes stress tests at scale, these numbers remain optimistic.  

Beyond speed, Sui addresses data storage costs, a growing problem for blockchain validators. The Storage Fund introduces an upfront payment model where users cover the cost of storing their transactions. This reduces the long-term validator burden, but it’s still unclear if the economics will hold up as transaction volume scales.  

$SUI’s Tokenomics  

Sui’s native token, $SUI, underpins the network. With a fixed supply of 10 billion tokens, distribution is structured to prevent inflation spikes while sustaining long-term liquidity. As of early 2025, around 3.1 billion tokens were in circulation, with more unlocking gradually through 2030. 

This staged release model prevents sudden price crashes, but investor behavior around major unlocks is notoriously unpredictable.  

The token’s primary functions include:  

1. Transaction Fees: Every on-chain action requires fees in $SUI, compensating validators.
2. Staking & Security: Holders can stake tokens to support network security and earn rewards. Staking returns aim to favor long-term participation over short-term speculation. 
3. Governance: $SUI holders get voting rights on protocol upgrades, economic policies, and validator parameters. 
4. Ecosystem Growth: Half of the total supply is allocated to community initiatives, developer grants, and infrastructure expansion.  

Unlike Ethereum, Sui doesn’t automatically burn transaction fees, which limits its deflationary mechanics. Instead, it uses a dynamic gas fee model where costs adjust every 24 hours, based on network demand and validator input. This is meant to stabilize transaction prices, but whether it prevents fee volatility over time remains to be seen.  

Sui’s token economy borrows elements from Solana’s while introducing tweaks like storage sustainability incentives and a structured unlock schedule. The real challenge is whether demand will scale to match increasing token availability. 

If developer adoption accelerates, demand for $SUI could absorb upcoming releases. If not, supply-side pressure could lead to volatility, particularly around investor and team token unlocks.  

Sui has many technical selling points, but the market ultimately cares about adoption. If dApps, games, and DeFi projects actually migrate to Sui and gain traction, its token economy has legs. If not, no amount of theoretical scalability will save it from fading into the crowd of “promising” Layer 1s. 

Sui is attempting to reimagine the blockchain architecture with an object-based model that shifts away from the conventional account-based transaction design. By structuring data as programmable objects, Sui enables parallel transaction execution, aiming to address the scalability issues that bog down traditional Layer 1 blockchains. 

This approach sidesteps the serial processing bottlenecks that have long plagued performance and throughput, though its real-world efficiency will depend on developer adoption and validator performance.

At the core of Sui’s architecture is the Move programming language, originally developed by Meta for the Diem project. Move’s resource-oriented design prioritizes security and predictability, offering guardrails that significantly reduce common vulnerabilities like double-spending and unintended state changes. 

For sectors like finance, gaming, and NFTs—where preserving asset integrity is non-negotiable—Move’s strict ownership rules and modularity provide a safer alternative to Ethereum’s Solidity. The challenge, however, lies in wooing developers away from Ethereum’s vast ecosystem to embrace an arguably less battle-tested framework. 

On paper, Sui delivers an enticing theoretical throughput of 125,000 transactions per second (TPS), underpinned by its directed acyclic graph (DAG)-based mempool system. It employs Narwhal to manage transaction data efficiently and Bullshark to handle Byzantine Fault Tolerant (BFT) consensus. 

This dual-engine system avoids sequential block-by-block processing, allowing high-speed execution with reduced congestion risk. While the architecture looks robust in controlled conditions, whether Sui can sustain such performance metrics under the unpredictable peaks of real-world demand remains to be seen.

Scalability further sets Sui apart, at least in theory. Its ability to dynamically allocate resources based on demand could be advantageous over rigid, monolithic systems that buckle under high usage. This flexibility promises predictable transaction fees and operational stability for validators. However, maintaining this balance as the network grows will require careful tuning to avoid overloading validators or pricing out smaller participants. 

Security is another area where Sui takes a calculated step forward. Move’s intrinsic protections, such as eliminating reentrancy attacks, bolster the baseline safety of applications built on the network. Regular audits—like recent ones from Trail of Bits—lend credibility to its robustness claims. 

While no blockchain is immune to exploits, Sui’s proactive stance on security does provide a higher degree of confidence for developers entering its ecosystem.  

For developers and users, Sui’s combination of high throughput, near-instant finality, and programmable object functionality offers a fresh alternative to legacy smart contract designs. 

However, its ability to challenge industry giants like Ethereum depends as much on developer migration and user adoption as it does on technical superiority. The narrative of displacing entrenched competitors will hinge on whether Sui can consistently deliver on its promised performance in production environments.  

Sui’s Delegated Proof-of-Stake (DPoS)

Sui’s Delegated Proof-of-Stake (DPoS) model employs a Byzantine Fault Tolerant (BFT) consensus mechanism that emphasizes throughput without compromising security. Unlike blockchains that enforce sequential validator roles, Sui eschews rigid block-building for a parallel processing approach when transactions lack dependency conflicts. 

The result is faster transaction finality with decentralized execution—at least in theory.

Validators hold a central role in this ecosystem. Sui’s infrastructure allows them to process transactions flexibly, reducing the time required for finality. Delegators, meanwhile, can stake their $SUI tokens with validators to participate in governance and earn proportional rewards without running full nodes. 

This system encourages broader participation, although the balance of power among validators will require ongoing vigilance to prevent centralization—a stubborn challenge for most DPoS systems.

What truly distinguishes Sui’s consensus is the tandem operation of Narwhal and Bullshark. Narwhal serves as the transaction mempool, ensuring efficient data organization and availability. Bullshark then finalizes transactions using a Byzantine Fault Tolerant architecture. 

This setup reduces communication lags among validators and bolsters throughput under heavy network loads. However, like any innovative system, the effectiveness of this design will ultimately depend on sustained real-world testing, not just theoretical superiority.

While DPoS streamlines certain aspects of blockchain operation, it does raise legitimate concerns about validator power consolidation. Sui partially mitigates this by encouraging widespread delegator participation, but it’s no silver bullet. 

Long-term decentralization will require active community governance and measures to prevent larger validators from dominating the ecosystem. How Sui addresses these structural risks will significantly influence its success as it scales. 

Final Thoughts:Will Sui Be a Layer 1 Powerhouse or a Hype Cycle Casualty?

Sui has delivered an ambitious vision: a blockchain that challenges Solana and Aptos with cutting-edge architecture, a developer-friendly ecosystem, and record-breaking transaction speeds. 

The object-based model, scalable Move programming language, and parallel execution make it one of the more interesting Layer 1 contenders in recent years. In theory, Sui avoids the congestion and downtime issues that have plagued competing high-performance chains. 

But theory and real-world adoption are two entirely different challenges. Since its May 2023 launch, Sui’s ecosystem has grown rapidly, with over $2.1 billion TVL by early 2024—a milestone that confirms user interest. However, short-term speculation and hype often drive early adoption in new blockchains. 

The real test comes when the initial excitement fades, and projects must deliver sustainable value beyond trader activity.  

One crucial concern is Sui’s tokenomics. With only 28% of the 10 billion $SUI supply in circulation, upcoming unlocks will inject billions of tokens into the market between now and 2030. If Sui’s developer ecosystem and transaction volume don’t expand simultaneously, this supply pressure could weigh heavily on long-term price stability. 

Even with technical advantages, competing with Solana’s deep liquidity and Ethereum’s network effects is no small task.  

Moreover, Aptos also uses Move, meaning the battle for developer talent is fierce. While Sui’s infrastructure offers true parallel execution, it must prove that this translates into a superior developer experience and that projects built here can scale efficiently in real-world applications. 

The chain has so far avoided Solana-style network crashes, which is promising, but sustained stability under mainstream demand remains an open question.  

Ultimately, Sui isn’t just a tech experiment—it’s a bet on whether architecture can overcome crypto’s network effect problem. The best infrastructure doesn’t always win; it’s about adoption, developer tooling, liquidity depth, and platform stickiness. 

If Sui can onboard major projects, maintain security, and balance supply mechanics smartly, it could cement a spot next to Solana, Ethereum, and other top Layer 1s. If not, it may follow the fate of countless ambitious blockchains—technically brilliant but commercially overshadowed.  

Sui’s Outlook in 2025

In closing, here are a few questions to noodle on: 

???? Can Sui sustain long-term developer interest, or will Move adoption plateau against Solidity’s dominance over developers?  

???? The Sui Network unlocked over $250 million worth of its native token on February 1, 2025. Will the market absorb token unlocks, or is there a significant risk of sell pressure impacting price?  

???? Sui’s theoretical maximum transaction speed is 297,000 TPS, surpassing Solana’s 65,000 TPS. Does the network truly offer practical advantages over Solana in real-world usage, or is its competitive edge mostly theoretical?  

???? As more Layer 1 chains integrate scalable execution models, institutional adoption is growing, with major asset managers like BlackRock and Fidelity exploring tokenization. How will institutional and retail traction evolve as more Layer 1 chains integrate scalable execution models?  

Our verdict: Sui is a layer 1 to watch, but the hard part is just beginning.

The post Sui Blockchain Explained: How It Works and What You Need to Know appeared first on CoinCentral.

According to a January 30, 2025 report by cybersecurity platform Immunefi, cryptocurrency hacks for January alone amounted to a staggering $74 million in losses. A single centralized finance (CeFi) platform—Phemex—accounted for $69.1 million of that sum. 

As such, CeFi platforms bore the brunt of the damage, making up 93% of the month’s total losses, even though these custodial services are supposed to be the “safe” option for investors. 

Meanwhile, 19 incidents targeted decentralized finance (DeFi) protocols, signaling they aren’t off the hook either.

The honor of the most frequently attacked blockchain belongs to Binance’s BNB Chain, which saw 50% of January’s on-chain losses. Close on its heels was Ethereum, responsible for 25% of the total. 

This adds yet another chapter to the ongoing narrative of blockchain vulnerabilities, centralized platform failures, and the billion-dollar question: what will we learn?

CeFi’s Achilles’ Heel

January’s hack frenzy didn’t happen in a vacuum; it’s part of a broader trend of increasingly targeted attacks. The infamous Phemex hack, which saw $69.1 million evaporate overnight, was orchestrated by exploiting access keys held by the platform. Contrast this with rising vulnerabilities in DeFi, where hacks tend to exploit faulty smart contract logic rather than centralized custodial practices.  

DeFi saw fewer outright losses in January 2025 but remains vulnerable. January’s exploits exposed loopholes in high-profile projects, suggesting that while users may flee CeFi for ideological or security reasons, decentralization doesn’t guarantee immunity.  

And let’s address the elephant in the room: wallets. 

While hardware wallets provide an excellent air gap, the average user often exchanges functionality for security by relying on hot wallets or exchange-based custody. 

That’s how even tech-savvy users become victims of phishing schemes and social engineering attacks.  

A practical fix is to use hardware wallets for long-term holdings, conduct regular checks on smart contract audit histories, and don’t store passwords where a hacker could guess them. 

Keep your funds diversified. Using a mix of hardware wallets, multi-sig solutions, and trusted DeFi protocols reduces the chances of a single point of failure wiping you out.  

Stay current on audits. Even the shiniest DeFi projects need regular scrutiny. If a protocol hasn’t been audited recently, think twice about locking up significant funds there.  

But let’s dig deeper into *why* this happens. CeFi platforms remain ripe for exploitation because they essentially mirror the cybersecurity flaws of Web2 technology while trying to dabble in Web3. This mishmash allows hackers to utilize well-established attack vectors—phishing, social engineering, or exploiting vulnerabilities in centralized architecture. And because these platforms store funds en masse, the rewards are worth the risks for attackers.

Moreover, the recent compliance push hasn’t helped. Stricter KYC/AML regulations force CeFi platforms to expand their operational surface: adding layers of identity verification, even more user data, and centralized databases—all of which create extra doors for hackers to kick down.

DeFi Crypto Hacks: BNB and Ethereum Hacks January 2025

The second troubling statistic from January’s report is the fact that BNB and Ethereum remain at the epicenter of crypto exploit incidents. Both chains have become magnets for attacks, together accounting for 75% of the month’s blockchain-related losses.

So, why are these titans of the blockchain space still vulnerable? For starters, popularity can be a curse. BNB Chain and Ethereum host thousands of projects, creating sprawling digital ecosystems that are exponentially more complex than smaller blockchains. 

This complexity introduces an endless stream of bugs and vulnerabilities at both the smart contract and protocol levels. 

Hackers don’t need to break into the entire chain—they just need one poorly written contract to exploit a dApp. 

Both networks have doubled down on security initiatives; Ethereum introduced account abstraction while BNB Chain recently implemented the BEP-171, a hard fork designed to enhance chain security.   

Immunefi reported 19 security incidents in DeFi space, including notable protocol exploits pointing to lingering vulnerabilities in nascent projects. While DeFi accounted for only 6.5% of total losses, this smaller figure is misleading, it only means DeFi flies under the radar until a catastrophic exploit occurs

In DeFi, much of the issue boils down to a relentless focus on speed over security. Developers often prioritize launching products quickly to make it in an endless race for funding, liquidity, and investor attention. 

This rush creates an inevitable backlog of vulnerabilities that are exploited post-launch. 

Final Thoughts: Let’s Put a Stop to Crypto Hacks in 2025

The $74 million lost in crypto hacks this January serves as a sobering reminder that “trust” in crypto is still fragile, whether you’re in CeFi or DeFi. 

Hence the need for a trustless system.

Sure, it’s a smaller number than last year’s disaster-filled January ($133M lost back then). But does that really reflect progress? We’ll see in the coming months. 

For users, this pattern is an urgent wake-up call. Here’s what you can do to protect yourself in 2025 and beyond:

1. Get educated on popular hack attempts, such as phishing links opened automatically in sketchy sites. 
2.  If you’re not already using a hardware wallet or self-custody solution, make it your top priority. Tusting third parties with your funds is a choice, not a necessity.
3.  Stick to well-audited protocols and avoid newly launched projects until they’re proven safe.

Where does this trend go from here? If the crypto world learns anything, 2025 could become the year of genuine security innovation. Beyond slapping band-aids on hacked infrastructure, blockchain projects, audit firms, and cybersecurity teams must up their game. That means proactive defense, not reactive patchwork.

The post Crypto Hacks 2025: How $74 Million Vanished in January Alone   appeared first on CoinCentral.

Three days before his second inauguration, Trump’s official X (formerly Twitter) and Truth Social accounts shared an announcement about a new Solana-based memecoin, $TRUMP.

“My NEW Official Trump Meme is HERE! It’s time to celebrate everything we stand for: WINNING! Join my very special Trump Community. GET YOUR $TRUMP NOW,” the post read, linking to a website.

Within minutes, the cryptocurrency was trading in the hundreds of millions of dollars as excited traders rushed in, skeptics raised alarms, and blockchain sleuths got to work investigating. 

Within hours, $TRUMP had a market cap of nearly $7.5 billion. 

But is the Trumps memecoin actually legit? 

The evidence so far suggests two possibilities: Either this is an official launch sanctioned by Trump, or his accounts were hacked in what could be one of the most elaborate crypto scams in recent memory. 

Let’s unpack the situation.

Update: January 24th, 2025. It appears the coin was actually launched by Trump organization and was endorsed by Trump prior to becoming President. H

What Happened: Trump’s Solana Memecoin Moons

The announcement came late Friday night, first on Truth Social and shortly after on Trump’s X account. 

Some rumors say he confirmed it during his crypto gala. 

Both posts featured identical language promoting $TRUMP, alongside a link to a website that resembles those used for Trump’s past NFT collections.

The coin’s website credits CIC Digital, the same official licensee behind Trump’s NFT collections from 2022 and 2023. The infrastructure and deployment of the site also align with Trump’s earlier ventures, leading some to conclude it’s legitimate.

The memecoin immediately gained traction. As of now, $TRUMP is trading at $8.32 with a self-reported market cap of $6.7 billion. However, 80% of the tokens are locked and will gradually unlock over the next three years, making the circulating supply—and its true market cap—much smaller.

Blockchain tracking sites show that the coin has generated roughly $680 million in trading volume in its first hours of existence, placing it among the most actively traded new cryptocurrencies.

The Case for $TRUMP Being Legitimate

If this is a sanctioned Trump project, it would align with his recent pro-crypto stance. Trump has previously dipped his toes into Web3 with multiple NFT collections, and he’s publicly endorsed World Liberty Financial, a decentralized finance platform.

Observers have pointed out that the $TRUMP website is remarkably similar to Trump’s NFT sites, down to the hosting provider, Heroku. 

This consistency has led blockchain experts like the pseudonymous engineer cygaar to suggest that the same team likely deployed both projects.

Additionally, the posts on X and Truth Social have remained live for over 12 hours, with no follow-up indicating a hack or disavowal from Trump’s team.

Trump’s presidency has also leaned heavily into memes and online engagement, so launching an official memecoin as a cultural and financial rallying point wouldn’t be entirely out of character.

Further, he’s close with Elon Musk, who owns X. If it were a hack, he’s got direct access to the owner of the platform– which is more than the 99.99% of people who have had their X profile hacked. 

The Case for Skepticism: Is Trump’s Memecoin a Scam?

Despite the evidence pointing to legitimacy, there are reasons to remain cautious.

First, the coin’s funding origins have raised eyebrows. 

On-chain sleuths discovered that the project was seeded with millions of dollars from wallets linked to Binance and Gate.io, exchanges that do not cater to U.S. customers. For a project tied to a U.S. president, this is an unusual choice—and potentially problematic from a regulatory perspective.

Second, Trump’s high-profile status makes his accounts a prime target for hackers. 

One red flag is that the top ten holders have 86% of the coin, and the contract ownership is not renounced.

The crypto industry has seen countless examples of high-profile figures’ accounts being compromised to promote pump-and-dump scams. In most cases, the hacked posts are quickly deleted, but the extended time these posts have remained live complicates the picture.

Lastly, while the coin is trading actively, many memecoins experience sharp rises followed by equally sharp declines as liquidity dries up or early adopters sell off their holdings. Whether $TRUMP holds its value or proves to be a speculative bubble remains to be seen.

Ultimately, $TRUMP is real, but the argument here still holds.

So, What if $TRUMP is Real? 

If $TRUMP is legitimate, it could signal a major shift in Trump’s approach to cryptocurrency, and a conversation would need to be had about the role of memecoins here on out. 

 As a sitting president, his endorsement of a memecoin would elevate the conversation around crypto to the highest levels of global politics– and likely not in a good way. 

A Trump-backed memecoin would also present opportunities and risks for the U.S. crypto market. 

On one hand, it could rally his supporters around blockchain technology, potentially boosting adoption. 

On the other, it raises questions about the regulatory implications of a president directly promoting a cryptocurrency.

What It Means If $TRUMP is a Scam

If Trump’s accounts were hacked, this could go down as one of the most sophisticated scams in crypto history.  A scam of this magnitude would likely lead to calls for stricter regulations around crypto and heightened scrutiny of high-profile accounts. 

However, it’s now clear that the accounts were not hacked and the coin is actually legitimate.

The resemblance to Trump’s past NFT projects, combined with the coin’s rapid adoption, suggests that the attackers put significant effort into making the project appear authentic.

It would also serve as yet another cautionary tale for traders chasing the latest trend without proper due diligence.

How to Buy $TRUMP

Buyer beware– this is not financial advice.

One interested in purchasing $TRUMP would have to do so through a Solana-based exchange, such as the Jupiter exchange and by having a non-custodial wallet, such as Phantom wallet.

It’s verified, but the contract address is listed on sites like CoinMarketCap as 6p6xgHyF7AeE6TZkSmFsko444wqoP15icUSqi2jfGiPN

This is found on SolScan as well.

The next step would be to paste the address into the coin search bar, as there are already dozens of fake Trump memecoins (if this one is considered real) floating around.  This will allow you to make your purchase in SOL or other SOL-compatible tokens.

It has also been listed on Coinbase and Robinhood.

Final Thoughts: Where Things Stand on $TRUMP

At this point, it appears $TRUMP is real coin, meaning it has the endorsements of Trump and his organization. It also also been verified, and listed on Coinbase and Robinhood. The team even launched a $MELANIA after the First Lady shortly after. 

For now, the coin’s trading volume and market activity are impossible to ignore. Whether $TRUMP becomes a cultural phenomenon or a fleeting meme, it’s already a defining moment for crypto in 2025.

As always, if you’re considering getting involved, proceed with caution. The crypto market is as volatile as ever, and even legitimate projects can carry significant risks. Keep an eye on Trump’s official channels and the broader crypto community for updates—and, as always, don’t invest more than you’re willing to lose.

The post Is Trump’s Memecoin Legit? Here’s What We Know About $TRUMP appeared first on CoinCentral.

On Tuesday, Balland and his wife were taken from their home in central France. The kidnappers held them at separate locations, reportedly using extreme violence, including severing one of Balland’s fingers, to coerce payment. 

French elite police units (GIGN) launched a high-stakes rescue operation, recovering both victims and arresting ten suspects.  Balland sustained injuries to his hand (obviously), while his wife, though unharmed physically, is receiving care for psychological trauma.

Most of the ransom, paid in cryptocurrency, has already been traced and seized, highlighting the growing effectiveness of law enforcement in addressing blockchain-related crimes. Ledger CEO Pascal Gauthier thanked authorities for their swift action and acknowledged the severe impact of the ordeal on Balland and his family.

While cryptocurrency’s pseudo-anonymous nature has often been viewed as a liability, tools like Chainalysis and CipherTrace revolutionize crime-solving. 

Authorities’ ability to trace, freeze, and recover stolen crypto funds is improving, as evidenced by the swift response in this case. Such capabilities are critical as criminals increasingly turn to digital assets.

How the Ledger Kidnapping Will Impact Crypto: Protecting Crypto Executives from Threats

As cryptocurrencies generate immense wealth, their appeal to criminals is rising. 

Unlike traditional assets, crypto is often portable, liquid, and pseudonymous—making it an attractive target for extortion and theft.

However, it’s no easy task– many high-profile crypto holders often don’t have immediate access to their cryptocurrency themselves, often using a multi-sig approach. 

This is far from an isolated case. 

Last year, WonderFi CEO Dean Skurka was kidnapped in Toronto, where attackers demanded and received a hefty ransom. Blockchain investigator ZachXBT has reported an uptick in physical attacks on European crypto traders, often involving public figures with well-known crypto holdings.

 In 2017, Pavel Lerner, CEO of crypto exchange Exmo, was abducted in Ukraine and released only after paying a Bitcoin ransom. Similar cases in Asia and Europe have revealed a growing playbook for criminals targeting crypto wealth, evolving as the industry matures.

This is first, and hopefully the last, of crypto ransom attacks in 2025.

These incidents reveal a troubling trend: while crypto protects against certain forms of financial exploitation, it can also attract dangerous real-world threats.

Even for less prominent figures, the risks are growing. Sharing wallet addresses publicly, flaunting profits on social media, or meeting buyers and sellers in person can lead to unforeseen dangers. 

It’s essential for crypto users at all levels to understand how to minimize exposure to potential threats in both digital and physical spaces.

This kidnapping could have ripple effects on the industry. Regulators may push for stricter controls, such as enhanced KYC protocols for wallet providers or mandatory reporting of crypto holdings. 

At the same time, companies may explore better tools for safeguarding executives, knowing that public trust in crypto hinges on both its digital and physical security.

Final Thoughts: Ledger Co-Founder David Balland’s Kidnapping Highlights Tricky Gaps in Industry Security

The emotional scars of such events linger far longer than the physical wounds. For executives and their families, the constant threat of being targeted weighs heavily, affecting not just their personal lives but their ability to lead. This highlights a need for mental health resources and trauma support within the industry.

Any crypto executive kidnapping incident kidnapping highlights a critical gap in the industry’s focus on security. For years, the spotlight has been on protecting digital wallets and combating cybercrime. 

However, the physical safety of executives, traders, and public figures in crypto is becoming an equally urgent issue.

1. Operational Security (OpSec): Crypto holders must rethink how they share personal information, boast about holdings, or engage with strangers.
2. Corporate Accountability: High-profile crypto companies like Ledger must prioritize physical safety protocols for their leaders.
3.  Law Enforcement Evolution: The ability to trace and recover crypto ransoms shows progress in addressing blockchain-based crime, but it also underscores the need for ongoing collaboration between crypto firms and authorities.

This incident is a stark reminder of the human vulnerabilities in an increasingly digital economy. 

While crypto’s decentralized nature offers financial freedom, it also requires new approaches to protecting individuals who hold or manage significant assets.

As the industry matures, it’s imperative to address these risks, ensuring that innovation and safety go hand in hand. For now, the ordeal faced by Balland and his wife is a sobering call for better online and offline safeguards.

The post Ledger Co-Founder David Balland Kidnapped in France appeared first on CoinCentral.

No banks, no gatekeepers, no prying eyes—just you, your crypto wallet, and a world of possibilities. 

So when the IRS rolled out new rules mandating KYC (Know Your Customer) for DeFi front ends, it felt like throwing a toga party in a corporate boardroom. Or vice versa. You get the idea.

Forced transparency clashes with the very DNA of DeFi. 

Let’s unpack why KYC and DeFi have always been—and likely will always be—a hate-hate relationship.

Why DeFi and KYC Will Never Be Friends: A Comprehensive Dive

First, let’s get our definitions straight. 

KYC laws were created as part of a global effort to fight money laundering and terrorism financing, and they’ve been around in traditional finance for decades. 

In practice, KYC means financial institutions are legally required to verify the identities of their customers. 

When you sign up for a bank account, provide a copy of your driver’s license, or submit a utility bill to prove your address, that’s KYC in action. Makes sense, can’t really argue its necessity in most use cases. That’s why it’s a contentious topic. 

For centralized crypto exchanges like Coinbase and Gemini, KYC rules have long been a fact of life. Platforms like these are registered businesses with identifiable owners, so they comply with KYC regulations to stay in the good graces of governments. 

But DeFi? It operates in the gray space between finance and tech, built on permissionless, decentralized protocols. 

The idea of slapping KYC on a DeFi app isn’t just a logistical headache—it’s an existential threat.

The Origins of the the DeFi and KYC Feud

The clash between KYC and DeFi has been brewing since2018. 

Protocols like Uniswap, Compound, and Aave changed crypto trading, lending, and borrowing by eliminating the need for a central authority. 

Instead, users interacted with smart contracts— self-executing code that runs on the blockchain. 

No forms, no IDs, no approvals.

To regulators, this anonymity was an obvious red flag.

 Without KYC, bad actors could use DeFi platforms to launder money or evade taxes. For DeFi enthusiasts, though, anonymity was the whole point. The system was designed to be trustless and borderless—a financial system for everyone, no matter who or where they were.

The real fireworks began in 2021 when the U.S. Treasury flagged DeFi as a potential hub for illicit activity in its “Anti-Money Laundering and Countering the Financing of Terrorism” (AML/CFT) priorities. 

While regulators didn’t move immediately, the writing was on the wall: DeFi was in their crosshairs.

The IRS KYC Rule: What’s Happening Now?

Fast forward to 2024, and the IRS has officially dropped the hammer. The new rule, set to take full effect by 2027, requires DeFi front-end platforms to:

1. Collect user IDs and transaction details.
2. Report these details to the IRS.
3. Deny access to users who don’t comply.

If it sounds familiar, it’s because centralized exchanges were hit with a similar mandate earlier this year. But while Coinbase and its ilk have the infrastructure to handle compliance, DeFi platforms don’t. Most don’t even have employees, customer service desks, or compliance officers. 

Many DeFi front ends may simply shut down rather than comply. Others might try to adapt but risk alienating users, who could seamlessly switch over to another DeFi platform that doesn’t comply. 

Decentralized Finance vs U.S. Regulations: Would KYC Destroy DeFi?

The IRS’s move raises existential questions for DeFi. Here are a few key ways KYC could shake things up.

Liquidity could dry up. DeFi runs on liquidity. When users provide funds to protocols in exchange for rewards, those funds create the pools that power lending, borrowing, and trading. 

But if KYC requirements spook users, or just don’t want their details shared with the IRS, they might withdraw their liquidity, shrinking the ecosystem.

DeFi could lose its decentralized soul. Sounds dramatic; the beauty of DeFi lies in its decentralization. 

Enforcing KYC would likely push DeFi platforms toward centralization. Platforms might have to partner with intermediaries or centralize their operations to comply, defeating their core purpose.

Innovation could move offshore. Like many crypto exchanges fled to friendlier jurisdictions after the U.S. tightened its regulatory grip, DeFi protocols might do the same. 

Developers could relocate to countries with less stringent rules, limiting U.S. users’ access to cutting-edge projects.

Legal challenges are almost certain. Leading figures in the crypto industry, like Hayden Adams of Uniswap, have already criticized the IRS rule, framing it as an attack on innovation. 

Crypto advocacy groups like the Blockchain Association are expected to challenge the rule in court, arguing that it oversteps regulatory authority and could stifle innovation in the U.S.

Privacy-focused alternatives will rise. Users might turn to privacy-focused projects because KYC requirements make traditional DeFi less appealing. A handful of protocols offer complete anonymity (albeit controversial), and new projects emphasizing zero-knowledge proof technology could gain traction. 

These technologies allow users to verify their identity or funds without revealing sensitive details, offering a potential middle ground.

A History of Resistance: DeFi and KYC

This isn’t the first time crypto has faced off against regulation, and history suggests the community won’t back down without a fight. 

When New York introduced its controversial BitLicense in 2015, many crypto companies simply left the state, which was a significant component of the New York City talent drain to pro-crypto and pro-business cities like Miami. 

Similarly, after China banned Bitcoin mining in 2021, miners didn’t stop—they just moved to Kazakhstan, the U.S., and other countries with looser mining restrictions.

DeFi could follow a similar path. The protocols themselves—being decentralized—can’t be shut down. 

At most, regulators can target the front ends (the user-friendly websites). 

But for savvy users, interacting with DeFi directly via smart contracts or decentralized app (dApp) browsers isn’t that difficult. It’s not ideal for mainstream adoption, but it’s a workaround that hardcore users will embrace.

Final Thoughts: What Happens Next for DeFi and KYC?

The fight between KYC and DeFi is far from over. 

While regulators like the IRS are doubling down on compliance, DeFi developers are innovating at breakneck speed. Whether through legal battles, technological advancements, or sheer stubbornness, the crypto community will find ways to adapt.

Still, the IRS’s rule is a watershed moment. It signals a future where governments won’t sit idly by while decentralized systems thrive outside their control. The question isn’t just whether KYC and DeFi can coexist—it’s whether the vision of decentralized finance can survive the growing pains of regulatory oversight.

For now, the best thing the average DeFi user can do is stay informed. 

The battle over financial privacy is heating up, and the decisions made in the next few years could shape the future of finance for decades to come.

Here’s how we see it playing out.

Some DeFi front ends—Uniswap, Aave, and others—may quietly explore options to comply with the IRS’s KYC requirements, even if publicly they dig in their heels. 

Expect a mix of strategies: some may implement geofencing (banning U.S. users outright), others may begin exploring partnerships with compliance providers, and some may double down on decentralizing further to escape the regulatory crosshairs.

Crypto advocacy groups, like the Blockchain Association or Coin Center, will likely file lawsuits challenging the IRS’s authority to enforce these rules. 

The crux of the argument is that DeFi protocols aren’t “brokers” and therefore fall outside the scope of the law. Makes perfect sense to us, but these cases could drag on for years but expect at least a few fiery court battles to kick off within months.

Now, assuming nothing changes and we’re headed for KYC enforcement… 

DeFi platforms targeting U.S. users could see a sharp decline in liquidity as privacy-conscious users pull out. 

This will be most apparent on big-name protocols with centralized front ends, as users migrate to decentralized alternatives or non-U.S. platforms. 

However, DeFi is global, and regions like Europe and Asia (especially Singapore and Hong Kong) may absorb some of the liquidity that leaves the U.S. ecosystem.

DeFi enthusiasts in the U.S. will begin (if they don’t already) using VPNs and other means to access those platforms. 

On that same note, we’ll see the rise of peer-to-peer and underground DeFi. Just as centralized exchanges gave rise to decentralized ones, KYC-enforced DeFi platforms will likely give rise to P2P protocols and underground alternatives. 

Some platforms already offer non-custodial, peer-to-peer trading without intermediaries. 

We could see a new generation of DeFi tools that bypass regulated front ends altogether, relying instead on wallet-to-wallet transactions and direct, smart contract interactions.

The push for KYC compliance will supercharge development in two key areas: privacy-preserving technologies (zero-knowledge proofs and decentralized identity solutions) and RegTech (Regulatory Technology) companies specializing in crypto compliance will explode in relevance, offering plug-and-play KYC solutions for DeFi protocols. 

Finally, while the U.S. tightens its grip on DeFi, other countries could go the other way. Regulators in jurisdictions like Switzerland, Estonia, and Liechtenstein have shown a greater willingness to work with the crypto industry than against it. 

If Europe adopts a softer, innovation-friendly approach, it could attract developers, users, and liquidity from the U.S., creating opportunities for global regulatory arbitrage.

As a reminder of what’s at stake, as of December 2024, DeFi’s total value locked (TVL)—a measure of all assets deposited in DeFi protocols—stands at $45.5 billion globally, down from its 2021 peak.

Platforms like Uniswap ($3.86 billion TVL), Aave ($4.6 billion TVL), and Curve ($3.5 billion TVL) dominate the space, processing billions in transactions monthly.

Transaction fees are also a meaningful source of revenue. Uniswap alone collects $3 million in fees daily, making it one of the most lucrative protocols in the ecosystem. That money doesn’t just number on a screen—it funds development, pays contributors, and fuels an entire industry of jobs. 

If the U.S. enforces overly harsh regulations, much of this activity could migrate offshore. The jobs, the innovation, the revenue—it’ll all follow. Globally, 1.4 billion adults remain unbanked, and DeFi allows anyone with a smartphone and an internet connection to access savings accounts, loans, and investment opportunities without needing a bank account or credit history.

The need for DeFi won’t disappear, but the opportunity in the U.S. might if we’re not careful. 

The post DeFi and KYC: A Hate-Hate Relationship appeared first on CoinCentral.

Just as the Bitcoin movement was born out of a desire to create a permissionless financial system, decentralized AI aims to democratize access to AI technologies by removing gatekeeper chokepoints. 

Decentralization, in step with the open-source programming philosophy, offloads the heavy burden of auditing and data security to a global community, which decentralization proponents believe to be an effective means to watchdog against the potential of a centralized AI Frankenstein growing too strong for centralized systems to control.  

If it sounds dystopian, that’s because it is—such was the plot of Terminator; Arnold’s character was just one of a series of machines designed by Skynet, a fictional artificial intelligence created by a centralized organization. 

While decentralized AI isn’t a guaranteed insurance policy against dystopia, it hints at a necessary alternative construction to the nascent centralized systems, the true risks we may not realize until it’s too late. 

Why Do We Need Decentralized AI in the First Place?

Machine learning improves with the quantity of data available, and consumer-friendly products like ChatGPT, Claude, and Perplexity.AI will continue to improve as they grow in popularity. 

Providing models with training data, Users are often oblivious to the value they generate for private companies just by using them. 

AI’s potential to pull the economic rug from virtually any career path and the out-of-whack monetary incentives for users are parts of an entirely different rabbit hole we’ll explore in a future article.

Perhaps the greatest risk is what happens if these highly trained models end up in the wrong hands. 

OpenAI, for example, has been under intense scrutiny over recent moves. 

Apple and OpenAI announced a partnership on June 10th, 2024, that would bring ChatGPT into Apple’s suite of products, including iOS, MacOS, and iPadOS, a collaboration that’ll likely lead to a mindblowing customer experience far exceeding any recent iOS update. 

The other hand, however, is troublesome. 

Although the press release states, “requests are not stored by OpenAI, and users’ IP addresses are obscured. Users can also choose to connect their ChatGPT account, which means their data preferences will apply under ChatGPT’s policies.”

Still, OpenAI’s models would be trained on incredibly intimate personal behavior and information, which could be used for whatever purpose. 

pic.twitter.com/7OgZAAdPf6

— Elon Musk (@elonmusk) June 10, 2024

Ok, CoinCentral, let’s take off the tinfoil hats for a moment. This doesn’t seem much more invasive than Siri or Alexa; besides, what could a company like OpenAI do with this data? 

We’re not in the business of fear-mongering or speculation, but the juxtaposition with this next data point is concerning. 

Just three days after the Apple news, OpenAI announced its appointment of former NSA Director (2018 to 2023) and Retired U.S. Army General Paul M. Nakasone to its Board of Directors. 

While we shouldn’t be dismissive of the NSA’s counter-terrorism and cyber defense efforts, it’s still a government apparatus notorious for spying on its citizens, popularized by NSA whistleblower Edward Snowden, who also criticized the appointment.

They’ve gone full mask-off: ???????? ???????????? ???????????????? trust @OpenAI or its products (ChatGPT etc). There is only one reason for appointing an @NSAGov Director to your board. This is a willful, calculated betrayal of the rights of every person on Earth. You have been warned. https://t.co/bzHcOYvtko

— Edward Snowden (@Snowden) June 14, 2024

We don’t mean to paint OpenAI, Nakasone, or the NSA with ominous and villainous overtones, but the reality is that, through relatively straightforward and flashy integrations, people may walk backward into a surveillance state they wouldn’t be inclined to enter through the front door. 

Knowledge is power, but not in the way your stereotypical classroom motivational poster claims. As useful and constructive a tool like generative AI is, it can also seem to have an enormous downside risk in the wrong hands that must be actively protected against.

Even a glass-half-full approach should acknowledge that while companies like OpenAI aren’t operating with a malevolence bent on world domination, safeguards should still be in place to prevent unintended consequences. 

Let’s take a breather from the dramatic flair of this section for a moment by looking at the decentralized AI’s structural advantages.

Centralized AI vs. Decentralized AI: On Technology

It’s important to frame decentralized AI not solely as a strategic safeguard against centralized AI but as potentially a better system overall. 

Let’s explore. 

Cost Advantages of DeAI

Scaling a centralized AI system is often compared to building a skyscraper on a single foundation; the higher you go, the more strain you place on that foundation. 

Centralized AI demands substantial computational resources, including powerful servers and large-scale data centers. As the appetite for AI grows, these systems face challenges in scaling efficiently and cost-effectively. 

ChatGPT, for example, was estimated to cost roughly $700,000 per day in 2023, a figure that has likely increased due to OpenAI’s advanced models—and that’s not counting any of the audio or generative video, as seen with Sora. 

Anthropic, creator of the Claude model, has raised over $7.6 billion to compete with OpenAI.

Decentralized AI systems utilize some variation of a network of globally distributed providers of computing power and data storage. Instead of going through AWS or private data centers, a DeAI entrepreneur could tap into a marketplace of 24/7/365 competitively priced compute and data storage resources.

A decentralized AI network could tap into various devices, from high-end servers to personal laptops and even smartphones. For example, by connecting your MacBook to a decentralized AI network, you can contribute its computational power to the collective pool, for which you’d be compensated, likely in the project’s native token. 

Editor’s note: We use the term “decentralized AI” or “DeAI” here, but this model has existed since decentralized computing projects such as Golem. Today, the category of “Decentralized Physical Infrastructure Network, or DePIN, largely overlaps with the creation and operation of compute marketplaces. 

This distributed approach creates a marketplace for idle (or active) compute resources, aligning proper business incentives for aspiring DeAI entrepreneurs and cash flow seekers alike. 

Centralized AI vs Decentralized AI: Efficacy, Data Security, and Privacy

By definition, centralized systems tend to have single central points of failure, making them susceptible to attacks and technical failures. A compromised central server can disrupt the entire AI system, leading to downtime and data loss. 

Famously, a distributed network made possible by blockchain should, theoretically, never experience downtime. 

Downtime is just the cost of doing business– most popular centralized businesses, such as OpenAI and Meta, have their own downtime trackers.

Blockchain, which underpins most DeAI systems, provides a secure and immutable ledger of transactions and interactions within the network. This makes it nearly impossible for malicious actors to alter or corrupt the system without detection. 

A large enough network should be fine even if some nodes go offline or are compromised.

It’s this distributed nature that inherently provides continuous uptime, ensuring that AI services remain available and providing a level of reliability that centralized systems struggle to match.

And then there’s the 21st-century digital bogeyman– data privacy. 

Imagine a vault containing the most valuable jewels in the world, all stored in one place– enough to make a goblin salivate. 

Centralized AI systems store vast amounts of data in central servers, making them a honeypot for cyberattacks. A single breach could expose sensitive information, causing irreparable harm to individuals and organizations alike. 

However, these data breaches aren’t necessarily the same thing as your Reddit password being exposed. The specter of surveillance looms large, as entities with access to centralized data can misuse it, eroding public trust and raising ethical concerns about privacy and consent.

It’s not a matter of a centralized company willingly using your data for evil but of the potential for them to neglect to secure it, as has been seen time and time again. 

Artificial intelligence innovation is moving at light speed, evidenced by OpenAI’s breakout ChatGPT app, which notched an estimated 100 million monthly users in just two months upon launch, making it the fastest-growing consumer app of all time– a milestone that took runner-up Facebook four and a half years.

For the average user, what’s not to love: ChatGPT is regarded as very accessible with a free version, premium costs of $20 per month, and reasonable API requests for developers. 

However, centralized AI is like a gated community, where only a select few have access to the resources needed for development. 

It goes beyond API accessibility– the average startup doesn’t have Google or Microsoft money to spend $700,000 daily on operational expenses. 

Many decentralized AI startups focus on providing developers with a marketplace where people from all over the world provide compute resources and access to servers at reasonable prices.

AI & Data Transparency

Nearly all centralized models operate behind a veil. 

The data in this “black box” of sorts used to train these systems is collected from limited, largely unknown sources, introducing biases that can lead to inaccurate, unfair, and discriminatory outcomes. 

Granted, this threat level seems negligible if something like ChatGPT’s chicken casserole recipe calls for using egg whites instead of egg yolks. Still, as society grows more dependent on AI’s efficiencies, biases and inaccuracies can compound into enormous issues.

Without transparency in their decision-making processes, it becomes challenging to identify and correct these biases, undermining the ethical integrity of AI applications.

Centralized data sets can’t be reliably audited by third parties, whereas it seems to be common practice by decentralized AI companies to have the entire model, including its training data, open source. 

Some DeAI startups are even working on marketplaces where users can buy and sell their data or lease individual models specifically trained on a narrow task with exceptionally high-fidelity data. 

These “personal AI experts” will likely have enormous commercial demand, especially if they can reduce the likelihood of error for an incredibly useful and scalable system prototyped by ChatGPT. 

But what about licensing? What if we know that a model is being trained from data from the New York Times, Reddit, or our favorite site, CoinCentral?

Here’s the thing with licensing: it’s expensive but also creates another regulatory chokepoint where a rulemaker can determine which data should or shouldn’t be permissible to be licensed. 

For starters, licensing costs may dissuade budding AI startups from building if they can even obtain permission to license the data. 

However, the notion of using licenses to restrict and control AI startups isn’t just Libertarian propaganda; it’s a courtroom drama evolving as we write this article. 

An August 2023 proposal by anti-crypto Senators Lindsay Graham and Elizabeth Warren advocated for creating a new federal agency, structured as a commission (full text here) to “regulate digital platforms, including with respect to competition, transparency, privacy, and national security.”

The proposal would require “dominant platforms” (as defined by the commission) to get a license that meets the designation. Specifically, the commission can also revoke licenses if the platform has “engaged in repeated, egregious, and illegal misconduct” and hasn’t undertaken measures to address the misconduct. 

The White House-issued AI Bill of Rights has a similar tone of regulatory control in order to protect.

Our discussion here isn’t whether AI innovation should be regulated or left completely laissez faire as there are extensive arguments for either side, but this model does little to address data transparency. 

It actually further muddles it, enabling a regulatory body to exert control to omit or add new information with the threat or reward of a permit. 

Many decentralized AI companies offer marketplaces for models, where third parties can actively audit, confirm, and even contribute to the training data for each model. 

Challenges for Decentralized AI 

Throwing the blockchain on something isn’t necessarily a panacea, and DeAI is fraught with challenges and shortcomings.

If centralized AI is in its nascent baby deer-legged stages, DeAI has yet to leave the womb. 

Few models work, let alone functional, robust marketplaces capable of rivaling the models made by OpenAI, Anthropic, Perplexity, Google, or most of the stuff shared on AI model directory, Hugging Face.

One of DeAI’s premier challenges is its reliance on diverse and distributed data sources. This can lead to discrepancies in data quality, making it difficult to maintain the accuracy and reliability of AI models. 

As such, data integrity and standardization across a network is a critical challenge.

While DeAI aims to enhance security and trust, it introduces new vulnerabilities; its distributed nature makes it susceptible to various attacks, such as data poisoning or Sybil attacks, where malicious actors can disrupt the system by flooding it with fake nodes. 

And then, there’s product-market fit for each marketplace. 

However, don’t let the novelty of DeAI dissuade you from learning about it. If the velocity of innovation of its centralized counterpart is any indication, it will move very quickly. 

Final Thoughts: So, Why Decentralized AI

Leaving the practical advantages described above aside, the spirit of decentralization is an extension of the rebellious demand for self-sovereignty and freedom from central control, as seen with Bitcoin. 

Understandably so, the crypto OGs may get flashbacks to the ICO craze of 2017 upon hearing of the combination of two trending technologies “(cryptocurrency and AI), but we implore our readers to consider the severity of what’s at stake. 

At brass tacks, the DeAI niche is about marketplaces– people who buy and sell compute and data storage resources, people who buy and sell access to AI models, people who participate in the economics of the native tokens via staking or liquidity provision, etc.

The more people who enter the DeAI space, driven by a passion for self-sovereignty or just general curiosity, will indirectly contribute to upholding privacy, security, and community-driven innovation as the standard for technology and not just fringe features. 

The post What is Decentralized AI and Why We Need It ASAP? appeared first on CoinCentral.

Or maybe you’re just getting started and have no idea what that last sentence means. 

Wherever you are on the DeFi knowledge spectrum, you’re at the right place. We’re going to do something few have accomplished before: try not to make DeFi sound extremely confusing and complicated. 

In this guide, we’ll review a crucial DeFi puzzle piece: liquidity pools and liquidity mining. 

Why are liquidity pools so important? Well, that answer depends on you.

From a technical POV, liquidity pools help make decentralized trading possible. Anyone can trade swap tokens at any time without any single centralized entity. Rather than peer-to-peer (P2P) trading, where Bob trades with Sally, you have peer-to-contract trading (P2C), where Bob trades with a smart contract. Liquidity pools are at the center of this. 

From an investing POV, liquidity providers are earning yields of 100% (and exponentially higher) APR from providing liquidity, which is a relatively passive but pretty risky practice. 

Let’s get started with a key concept, decentralized exchanges.

Liquidity Pools 101: How a Decentralized Exchange Works

Picture our ancestors trading chickens for seashells thousands of years ago. Now, imagine Ooga Booga, captain of the prehistoric seashell industry, throwing his seashells into a big magic vortex, which automatically spits out a predetermined fair-market value of chickens. 

This is obviously a gross oversimplification, but the vibe is similar to peer-to-contract trading in decentralized exchange. 

A decentralized exchange (or, if you want to sound really in the know, a DEX) is essentially software that allows people to trade (or swap) tokens without a centralized intermediary. 

A DEX can be open-source software created by independent developers, which should be audited by third parties to assess its efficacy and legitimacy. Many decentralized protocols are owned by a centralized parent company. Uniswap, for example, is a Brooklyn-based startup with a Series A led by famed venture capital firm a16z. In other cases, many DEX upstarts don’t have a centralized company established or an office you can call if things go awry. 

Rather than requiring a human third party to custody assets, DEXes use smart contracts to provide nearly instant settlement times. 

A DEX like Uniswap makes money by:

1. Charging a “protocol fee” of between 0.05% to 1%. This feature can be voluntarily turned on by UNI token holders per their governance features. 
2. Token price appreciation. 20% of the 4 billion UNI tokens were assigned to Uniswap employees. As the protocol and UNI token grow in popularity, so will the wealth of the company and of the token holders. 

DeFi protocols can differ in their liquidity protocols structure; one might charge higher fees, and one might distribute tokens that don’t have governance rights, etc. 

Since these exchanges are completely decentralized, they need access to a large number of funds to ensure traders always have access to the token pairs they need. 

To go deeper into DEXes, check out our decentralized exchange guide. 

This brings us to liquidity. 

Why Liquidity in DeFi Is Important

Ok, let’s take a momentary breather before we get into some nitty-gritty, but really freaking cool DeFi stuff. 

Liquidity is the extent an asset can be quickly purchased or sold at a price that reflects its true value; it’s at the heart of any functional market. 

A lack of liquidity correlates to higher-risk categories and is priced accordingly. Without liquidity, or anyone to purchase an asset, the demand, and subsequently the value, of the asset drops. For example, if I buy $1,000 of some obscure token, and every cryptocurrency exchange removes it from trading, I’d have nowhere to sell it, making it a much less valuable asset. 

Low liquidity also means low volume, which leads to a pesky thing called slippage, where your order executes at different tiers of decreasingly preferential prices. For example, when Elon Musk buys a massive $100M order of Bitcoin, his order might even move the market as the order is being executed. Let’s say the first 10M BTC is filled at $50k per BTC, then the next $30M at $52k per BTC, and the last $60M is at $53k per BTC.

Legacy systems offer relatively functional marketplaces for most needs; if Bob wants to sell his $TSLA stock, a stock trading platform can execute the trade almost immediately, often without slippage since most reputable stock exchanges only carry assets with significant volume. 

Since DEXes don’t have a centralized order book of people who want to buy or sell crypto, they have a liquidity problem. 

In other words, in the face of highly efficient exchanges, an exchange without liquidity sucks– and DEX developers planned for this. 

There are certainly infrastructural tradeoffs between the order book model that dominates centralized exchanges and the Automated Market Maker models in DeFi. However, the blockchain can offer significant improvements over traditional methods of exchange.

For one, most central marketplaces are confined to limitations such as market hours, reliance on third parties to custody the assets, and occasionally slow settlement times. 

A DeFi liquidity protocol enables: 

1. 1. Fast settlement: peer-to-peer trading settles immediately on-chain 
   2. Simple to use: The liquidity protocol smart contract determines the trading price algorithmically. 
   3. Non-custodial: A decentralized exchange doesn’t take custody of your private keys, meaning traders always have full control of their funds. 
   4. Interoperability: Many of DeFi programs are interoperable and can be stacked on other compatible apps, like Lego blocks. Think of a company like Uniswap as a “Liquidity-as-a-Service” platform, where other third-party dApps, wallets, and payment processors can grant their users access to liquid markets as an ingrained feature.
   5. 24/7/365 Global Liquidity: Traders get liquidity anytime and anywhere in the world.

Order books make sense in a world where reasonably few assets are traded, not so much the madhouse world of crypto where anyone can launch their own token. 

A centralized exchange like Coinbase or Gemini takes possession of your assets to streamline the trading process, and they charge a fee for the convenience, usually around 1% to 3.5%. 

DeFi aims to accomplish the same goal of enabling a fast “always-on” marketplace, but without holding anyone’s private keys or assets. And here’s the conundrum: how do DeFi protocols get access to funds to fill trades without turbulence?

That’s where liquidity pools come into play. 

DeFi Liquidity Pools in a Decentralized World 101:

A centralized exchange like Coinbase or Gemini uses the “order book” model, as do traditional marketplaces like the New York Stock Exchange. In the “order book” model, buyers and sellers bid in an open market: buyers want the asset for the lowest price possible, sellers want to sell for the highest price possible. For the trade to happen, buyers and sellers must agree on the price. 

That’s where the Big Hoss of the whole ordeal comes in– the Market Maker. A centralized exchange acts as the market maker by establishing a fair price where buyers and sellers are willing to meet. 

The Market Maker is always willing to buy or sell assets at a specific price, usually using its own pool of assets to make sure there is always something available. This means users can always trade on the exchange– cryptocurrency is unique in that exchanges operate 24/7/365, whereas something like the NYSE opens at 9:30 AM and closes at 4 PM EST.

Centralized exchanges invest resources to create a convenient and fair marketplace for users to exchange cryptocurrency, and make a hefty chunk of revenue from what they charge for facilitating the transaction. 

Deeper dive: To see how a centralized exchange functions as a business, Coinbase is a public company– check out its S1 Statement or regular earnings reports. 

The “order book” model is impossible without a market maker. 

Instead of buyers and sellers being matched by a central market maker like Coinbase, traders using liquidity protocols trade directly against a smart contract. Peer-to-contract! 

Where do the smart contracts get access to deep pools of funds to make trading possible? You guessed it– liquidity pools!

A liquidity protocol (think Uniswap, Bancor, or Balancer) acts as an Automated Market Maker (AMM) allowing users to access a liquid market at any given moment. 

A liquidity pool is a combination (“pool”) of at least two tokens, locked in a smart contract. 

Now, why would anyone do such a thing? 

Well, it’s pretty lucrative (and risky) and many yield seekers jump into liquidity pools in search of monetary gain. Others with a more technological bent view their participation in liquidity pools as a means to uphold a decentralized project. 

These sorts of things are better experienced than understood, so let’s run through some real-world examples. 

What is a DeFi Liquidity Pool in Action?

We just mentioned people trading on DEXes trade against smart contracts designed to provide liquidity at a fair price. Those smart contracts access liquidity pools for those actively traded tokens. 

We also talked about a liquidity pool being a combination of at least two tokens locked in a smart contract. 

Let’s dive into a liquidity pool– put on your snorkels. 

Liquidity pools were popularized by Uniswap, a decentralized exchange used by many in the DeFi world. The Uniswap protocol charges about 0.3% in network trading fees when people swap tokens on it. 

Suppose I am an aspiring liquidity provider. As such, I’m incentivized by liquidity pools to provide an equal value of two tokens in the liquidity pool. 

Liquidity providers are rewarded. The whole 0.3% trading fee (more or less, depending on the pool) paid by traders is distributed proportionately to all the liquidity pool providers. 

There are plenty of community-led calculators that provide a clearer estimate of rates and returns. 

DeFi Liquidity Pool Example #1: Liquidity Pools on Uniswap

For example, putting $10,000 in a WETH-ENS Pool at a 0.3% fee on Uniswap v3 is estimated to generate $132.04 per day in fees, at an estimated annual percentage of 481%. 

Going to the actual Uniswap site, we see that the ETH-ENS pool generated $72,320 in the past 24 hours, which were all distributed proportionately to the liquidity providers.

The estimated LP returns on any DEX will always be in the state of flux, and a myriad of DeFi yield farming applications such as aggregators exist to get liquidity providers the best rates. 

Keep in mind that these liquidity pool fees earned are just for the pool itself, paid by Uniswap and generated by traders of the platform. 

As liquidity becomes a sought-after commodity, some protocols have taken it a step further to compete for liquidity providers by offering liquidity pool token staking, which we’ll get into below.

DeFi Liquidity Pool Example #2: Liquidity Pools on ShapeShift Review

ShapeShift is a centralized cryptocurrency company that was founded in 2014, but elected to decentralize entirely in July 2021. It airdropped FOX tokens to its employees, stakeholders, and users, becoming a Decentralized Autonomous Organization (DAO.)

ShapeShift offers just one liquidity pool, WETH-FOX. 

I can provide an equal amount of WETH (it’s basically just normal ETH, but “wrapped,” the difference is insignificant for this discussion) and FOX (the token that powers the ShapeShift ecosystem.) 

I put in $3,750 of WETH and $3,750 of FOX for a total of $7,500. In return, I receive WETH-FOX Liquidity Pool tokens. 

I can then “Stake” these LP tokens for an estimated yearly reward of 116.91% APR.

Yes, you read that correctly—an APR of 116.91%. So, for the $7,500 WETH and FOX, I put in, I should get around $8,758 in profit in one full year, but this isn’t always the case.

Protocols often denominate the APR in the number of tokens (often the native token of the platform, like FOX) rather than a U.S. Dollar amount. Your actual dollar APR can be more or less depending on the value of the token. 

An APR like 110% APR, or even some as high as 90,000% or higher, isn’t an anomaly among other liquidity pools. 

So, for example, if the price of FOX token were to plummet, as it later would,  so would the value of all my rewards accumulated (paid in FOX)– not to mention that half the pool consists of FOX tokens.

So, who’s paying these bonkers DeFi yields? There’s no way they’re sustainable, right? 

What’s the Difference Between Liquidity Pools and Liquidity Mining?

The difference between liquidity pools and liquidity mining has to do with who pays the yield and how. 

Remember that the smart contracts written by protocol developers (such as Uniswap) determine how LP staking yields are paid, as a percentage of fees accrued from the token swapping on the platform. 

Some projects also give liquidity providers liquidity tokens, which can be staked separately for yields paid in that native token. This is a bit confusing, but the difference is more than just semantics. 

• The liquidity pool rewards are based on the protocol fees, like 0.3% on Uniswap.
• The liquidity pool tokens, which are staked on a different protocol, can earn 100%+ APR, paid in whatever token that protocol is incentivizing you with (i.e., FOX.)

Again, 

Liquidity providers received a percentage of trading fees in a particular pool. Liquidity pool rewards tend to decrease as more liquidity providers join, as per simple supply and demand. 

AND,

Liquidity providers who stake their liquidity pool tokens may get paid in other tokens as a further incentive to provide liquidity there as opposed to another platform. Are yields of 90,000% APR sustainable? Well, the protocol determines how much of its token it wants to print to sustain the yield. 

This is the primary difference between liquidity pools and liquidity providing, a contrast with blurred lines. 

The practice of seeking out the highest yield in various DeFi protocols is called yield farming; it can get pretty complicated, but it’s within reach for anyone wanting to learn.

Final Thoughts: Are DeFi Liquidity Pools Legit and Worth Your Time?

If you’ve made it this far, congratulations– you’ve just learned about one of the most important components of decentralized finance. 

It’s easy to get tripped up in all the funky protocols and token names. It’s important to keep in mind that DeFi is only a few years old, and things break. 

And no, this isn’t going to end as some wild-eyed sales pitch about how you, too, can automatically earn 90,000% yields with just a small investment. Our content isn’t investment advice—it’s all meant to be educational and, hopefully, entertaining. DeFi and crypto in general are incredibly risky. 

It’s no surprise liquidity pools attract both speculation and skepticism of equal intensity. As a nascent technology, liquidity pools have plenty of growth opportunities and risk factors that should be considered. Providing liquidity is very risky for reasons like a thing called impermanent loss, or even a total loss of funds through smart contract failures or malicious rug pulls. 

Liquidity is a critical issue in a decentralized digital asset landscape, and developers have come up with some fairly ingenious and creative solutions. Educating yourself on DeFi liquidity pools and liquidity mining is like having a flashlight in your toolkit of exploring the next era of finance. 

The post What is a DeFi Liquidity Pool: A Non-Technical Breakdown (w/ Examples!) appeared first on CoinCentral.

Let’s examine what’s driving the most recent prediction and which economic and institutional factors can align to make $250,000 a reality.

The Setting: How 2024’s Bitcoin Halving Shapes the Narrative

Bitcoin’s halvings have historically been price catalysts, reducing the number of new coins miners can earn by half. 

It’s a feature, not a bug, designed to introduce scarcity. 

Bitcoin rose from $12 to over $127 in 2012; it doubled within eight months in 2020, and hit an ATH of $68,000 in 2021. In April 2024, Bitcoin’s most recent halving, mining rewards dropped to 3.125 BTC per block. The resulting gain was modest at best with 7% in the months following the event. 

As we learned, Bitcoin’s past performance doesn’t guarantee future results. Back then, halvings took place in a relatively isolated ecosystem. 

Bitcoin is deeply tied to global financial markets today, making it vulnerable to broader economic shifts.

Some may argue the halving price uptick was dampened by broader economic instability, lingering inflationary pressures, and geopolitical tensions in Europe and the Middle East.

Still, with the expectation of a pro-crypto President who literally campaigned on supporting Bitcoin as a cornerstone of U.S. financial innovation and even floated the idea of a national Bitcoin reserve, hopes for another massive bull run have been reignited.

Inflation, Interest Rates, and the Role of Macroeconomics

The macroeconomic backdrop could be Bitcoin’s biggest hurdle—or its greatest ally. 

Over the past couple of years, inflation has been the villain of the global economy, forcing central banks to hit the brakes with aggressive rate hikes.

Though inflation has cooled somewhat, it’s still a significant concern for central banks. 

The Federal Reserve remains hawkish, holding interest rates at historically high levels to keep inflation in check. 

This is bad news for speculative assets like Bitcoin; at least, the mainstream considers it speculative, and the hardcore BTC maxi may disagree. 

High interest rates push investors toward safer, yield-bearing options, leaving less appetite for riskier plays.

Consider Bitcoin’s behavior similar to that of a high-growth tech stock: It rallies when optimism is high but stumbles when fear dominates. 

For Bitcoin to approach $250,000, inflation would need to stabilize further, and central banks might have to ease monetary policy. 

Imagine a scenario where the Fed signals rate cuts, and the economy steadies. That kind of shift could reignite risk-taking across markets, sending Bitcoin higher. But if inflation resurges or economic growth falters, Bitcoin could remain stuck in its current range, leaving $250,000 as a pipe dream.

Is Institutional Adoption a Game Changer for Bitcoin?

Institutional adoption adds legitimacy to an asset that once lived on the fringes. 

Companies like MicroStrategy now hold more than 150,000 BTC (158,400 BTC as of its latest SEC filing in November 2024), and the SEC’s approval of spot Bitcoin ETFs (which greenlit products from BlackRock, Fidelity, and Valkyrie) has opened new doors for investors. 

Heavyweights like BlackRock and Fidelity are actively acquiring BTC reserves for their funds and lobbying for more explicit cryptocurrency regulations.

Even crypto supporters within the U.S. government are gathering inertia to create a Strategic Bitcoin Reserve to hedge against economic instability and compete with other nations exploring similar strategies.

Institutional involvement is a double-edged sword. It boosts Bitcoin’s credibility and ties it closer to traditional financial systems, giving it another attack vector to attack by regulatory decisions, economic policies, and even quarterly earnings reports from major players. 

It’s no longer the “wild west” of finance—it’s wearing a suit and playing by different rules.

Imagine a flood of institutional money flowing into Bitcoin ETFs, driving demand and increasing prices. Now picture regulators suddenly slamming the brakes with new restrictions, throwing cold water on the rally. 

In other words, institutions are much easier to regulate– they’re essentially whales that can be easily convinced to dump their bags should a regulatory body choose to slam the hammer. 

However, ETFs allow investors to gain exposure to Bitcoin without directly holding it, meaning no network transactions occur when ETF shares are traded. This disconnect reduces miner revenue from transaction fees and could impact Bitcoin’s long-term network security.

Bitcoin’s $250,000+ Worth of Regulatory Challenges

Regulation has always been Bitcoin’s wild card. 

The SEC’s lawsuits against Binance and Coinbase remind us that the crypto industry is still in the early stages of development. 

It’s a tug-of-war: regulatory clarity paves the way for broader adoption, but excessive crackdowns could stifle innovation and scare off investors.

Central bank digital currencies (CBDCs) add another layer of complexity. Bitcoin’s role as a decentralized alternative might face new challenges if governments introduce widely adopted digital currencies. 

Donald Trump’s presidential election is perhaps the most bullish signal Bitcoin has received yet. BTC saw a roughly 35% gain in the three-week range surrounding the election, skyrocketing as it became clear Trump would win the presidency. 

Trump’s victory sent shockwaves through the financial world, but the cryptocurrency market, in particular, responded with an almost euphoric surge. 

A few factors are in play to explain the rally. 

Trump’s campaign made explicit overtures to the cryptocurrency community, promising to position the U.S. as the global leader in crypto adoption. He proposed creating a Bitcoin reserve and signaled intentions to integrate cryptocurrency into broader financial strategies. 

These pro-crypto policies struck a chord with the crypto crowd, particularly in swing states. Many politicians followed suit in advocating for crypto and were elected. 

For OG Bitcoin believers, seeing mainstream political backing for crypto paired with tangible investment in the ecosystem seems surreal.

But there’s more to this rally than optimism. 

Trump’s return to the political stage could bring regulatory clarity to bolster Bitcoin’s case as a legitimate financial asset. 

For years, crypto has been plagued by uncertainty—a patchwork of state and federal laws, murky tax policies, and an SEC seemingly at odds with the industry. 

Vocal Democrats like Elizabeth Warren disparaged crypto, and a growing anti-crypto sentiment among Democrat politicians increasingly pushed a growing population of cryptocurrency holders to vote Red. 

In the United States, approximately 50 million individuals, or about 15.4% of the population, own some form of cryptocurrency, with Bitcoin being the most widely held digital asset.

The Bitcoin rally could have lasting legs if Trump’s administration delivers on promises of precise, supportive regulation.

That said, caution is warranted. 

Politicians have a reputation for promising the moon but often need more clarity and timely timelines, leaving crypto innovation in bureaucratic limbo.

Markets are also unpredictable. Bitcoin’s rise is thrilling, but it’s still a very volatile asset. 

Profit-taking could easily trigger a correction if optimism cools or regulatory efforts face delays. 

Many Bitcoin bulls are sitting on hundreds of millions of BTC they purchased early in the 2010s, with some whales buying in bulk during the decade’s various dips. They are now sitting on multimillion—or billion-dollar portfolios.

While Trump’s pro-crypto stance is a win for the market, it does not guarantee smooth sailing. 

Global macroeconomic conditions, inflation trends, and geopolitical tensions remain wildcards that could influence Bitcoin’s trajectory.

What Would It Take for Bitcoin to Hit $250,000?

Let’s talk about what must happen for Bitcoin to hit $250,000. 

First, stabilizing inflation and central banks moving toward looser monetary policies wouldn’t hurt. They might be enough to trigger a domino effect of retail and institution adoption.

ETFs could drive billions in new capital into the market. 

Retail investors would get a strong dose of FOMO, with many buying in and helping BTC sustain momentum. 

It’s possible, but we don’t have a crystal ball, and no one is trying to sell you a crypto trading course. 

Is Bitcoin’s $250,000 Prediction Realistic?

The rally to $94,000 feels like a pivotal moment. 

A $100,000 will make mainstream news. The number is sticky; it’s fantastic.

For the first time in years, Bitcoin isn’t just riding on halving cycles or speculative hype—it’s responding to genuine political and economic signals. 

Whether this is the start of a sustained bull run or just a temporary spike remains to be seen. 

Either way, Bitcoin’s role in the global financial system has become much more interesting.

Bitcoin’s history is filled with bold predictions, some of which came true while others fizzled out. 

Predicting $250,000 in the near term means assuming a perfect storm of macroeconomic, regulatory, and market factors. 

Predicting $250,000 long-term seems more like just plain old math. 

Still, the allure of a quarter-million-dollar BTC is undeniable: for many, it’s a neat milestone that signifies financial freedom, and of course, for some, it means the typical bull market lifestyle splurges like Lambos, yachts, and donations to the Miami nightlife scene. 

Getting there requires more than hype: fundamental economic shifts, regulatory clarity, and a wave of institutional and retail enthusiasm. 

Whether or not that happens is anyone’s guess. If $250,000 is in the cards, it’ll result from a decade-plus long, hard-fought journey, not a quick leap. 

The post Bitcoin’s Path to $250,000: What History and Trump’s Presidency Tell Us appeared first on CoinCentral.

 Yield isn’t guaranteed, and performance varies significantly.

For example, yield farming with UST, Terra’s stablecoin, through dapp Anchor,  brought users about 20% yield consistently– up until UST depegged and was suddenly caught in a worthless spiral. Sure, the decentralized automated mechanism of earning yield on Anchor might still work, but the rewards are effectively worthless.

Alternatively,  simply just staking Solana earns about 7% APY, and the token has comparatively maintained its value (despite having an ATH north of $250 and currently sitting at about $60.)

How Does Yield Farming Work?

Yield Farming helps stimulate the flow of value within the decentralized ecosystem system,.

Let’s consider earning yield in traditional finance: money is issued by a central bank, and then commercial banks lend those funds to businesses and individuals. Banks levy an interest rate on those loans, thus making a profit. 

In the cryptocurrency DeFi economy, a yield farmer recreates the role of a bank, lending their funds for a specific purpose:

1. These coins may go to a liquidity pool, helping a decentralized exchange facilitate trades,
2. Or, Proof-of-stake coins can be staked to support the overall network.

“Farming” refers to reaping the annualized percentage gains through any of these mechanisms.

Is yield farming worth it? Let’s dive into the mechanics of yield farming so you can become more educated on what yield farming and how it functions. 

In this article, we’ll explore:

1. Yield farming’s relationship with DeFi
2. How yield farming works
3. Are your funds safe?
4. The risks of decentralized lending
5. The best DeFi projects for yield farming
6. The future of yield farming

Is Yield Farming DeFi?

Yield farming is one of the many facets of Decentralized Finance (DeFi), and the term entered the popular lexicon of the cryptocurrency world in 2020.

DeFi, as we know it, is an amalgam of various decentralized protocols and applications. It’s notable because it often doesn’t require the same barriers to entry traditional finance systems, and just about anyone with an internet connect can participate. However, the democratization of access shouldn’t distract away from the fact that it requires a high degree of scrutiny and responsibility– it can be far riskier than its traditional finance counterpart.

DeFi sprung from one of the use cases for the Ethereum protocol. The possibility for cheap and borderless transactions pushed the creation of startups that tried to mimic banks and financial brokers. DeFi applications branched out in various directions, including novel cryptocurrency trading algorithms, derivatives trading, margin trading, money transfers, and most importantly, lending markets. 

Cryptocurrency lending entered a phase of functional maturity largely due to two behemoth projects – Maker DAO, and Compound. 

So, where does yield farming come into play?

How Yield Farming Works

Yield farming depends on the inflows and outflows of a certain anchor asset, such as DAIm, the dollar-pegged coin that originated with the Maker DAO protocol. The DAI dollar peg makes the system more predictable by setting an intuitive value for each token, $1. Yield farming depends on a collateral of ETH or another token, which is used for loans and generates rewards.

A DeFi user usually locks in the chosen coins using the MetaMask browser plugin. Locking in funds means the wallet will communicate with a smart contract on the Ethereum network. Depending on the logic of the smart contracts, there are various ways to extract value, though the most traditional one is to levy an interest rate on a cryptocurrency loan. Users will pay fees to transact on the Ethereum network, and due to heightened interest, those fees may rise rapidly or make the network too congested to be able to participate successfully.

In the middle of March 2020, ETH prices dropped sharply, creating a perfect storm of market panic and triggering of multiple algorithms on the Maker DAO platform. The Ethereum network also slowed down transactions, not allowing the owners to increase their collateral. Multiple deposits (known as vaults) were liquidated, and DAI briefly lost its dollar peg.

In the case of falling prices, the 150% over-collateralization can help offset the risk partially. Projects like DeFi Saver can automatically increase the collateral to stave off liquidations. Liquidations happen when the minimum collateral requirement breaks down due to price volatility.

DeFi tends to work better in climate climbing asset prices, because the collateral locked for yield farming is safer. For example, if ETH prices drop by 33%, this would liquidate most deposits on Maker DAO. Smaller price fluctuations also mean holding ETH may, in the long run, be more profitable than yield farming.

Alexander Ivanov, the founder of the WAVES protocol, compares DeFi to the frenzy for initial coin offerings (ICOs). Ivanov is still optimistic about the future, only warning against another bubble due to irrational enthusiasm.

Please let’s not make a new ICO bubble out of #DeFI

— Sasha Ivanov (@sasha35625) June 23, 2020

The difference between an ICO and yield farming is that coins can be taken out of the DeFi protocol at almost any time, whereas participating in an ICO meant exchanging ETH or BTC for a new token. 

The new token could be changed back only by trading, once it was listed on an exchange. In DeFi, tokens become immediately liquid as they get pairings on the UniSwap exchange, a decentralized, automated trading protocol.

Are Your Funds Safe While Yield Farming?

All types of cryptocurrency investing carry risks. 

In DeFi, the lender is always in control of their funds, as operations happen in automated smart contracts and do not require the oversight of third parties. Unlike token sales, a person can withdraw their collateral at almost any time. 

However, smart contracts can dictate how and when you can withdraw your collateral, so be aware of you’re getting into, in particular during the cases of liquidation. 

What are the Risks of Yield Farming?

Locking your funds in vaults and using smart contracts is inherently risky. Smart contract exploits, which abuse the logic of the contract to generate high returns, and liquidations are a major threat to collateralized funds. The other big risk is the peg of the DAI stablecoin, which must retain its $1 value. Breaking the $1 peg will diminish the value of loans, and create panic selling and quick removal of liquidity.

The boom of DeFi also brought multiple untested protocols, using new smart contracts that led to malfunctions. The YAM DeFi protocol drew in close to $300 million in funds, but due to unforeseen smart contract behavior, led to the printing of thousands of billions of extra tokens. Other projects also release untested smart contracts, which may lead to losses of funds.

Another major concern is a more recent development: the Compound DeFi fund shows more than 1.3 billion DAI in its lending and borrowing markets, while there are around 421 million DAI coins created as of August 14, 2020. This situation resembles a debt bubble, in which cryptocurrency assets are created via the process of lending, thus circulating value that is artificially amplified by yield farmers. 

This situation may put pressure on the DAI dollar peg, and create more serious fallout in case of liquidations. So far, as of August 2020, greed and a price boom allow for the rapid growth of Compound DeFi. 

What are the Best Projects for Yield Farming

Maker DAO is one of the earliest successful attempts at cryptocurrency lending. Initially, lending DAI backed by ETH drew the initial bulk of capital into DeFi. 

Compound, a similar lending platform, followed soon after. Compound also evolved beyond lending, launching its own incentive COMP token. This caused an explosion in DeFi funding between July 15 and early August, when the amount of funds locked in yield farming doubled, from roughly $2 billion to above $4 billion. 

Both Compound and Maker DAO competed for the top spot in DeFi, based on locked value and on their well-known brands. In terms of algorithmic trading, projects like Augur, Bancor, and dy/dx remain prominent in the crypto space.

Alternatively, and not particularly “yield farming” per se, decentralized lending platforms and cryptocurrency interest accounts such as BlockFi and Celsius provide upwards of 8.6% APY on stablecoins without many of the complications of the yield farming outlined in this article, so they’re worth checking out if that’s up your alley.

Final Thoughts – What is the Future of Yield Farming

Things tend to happen very fast in the cryptocurrency world, and yield farming seems to have spiked into the mainstream foray in the blink of an eye.  

If one was compelled to cast a prediction for the future of Yield Farming, we recommend looking at all possibilities– both positive and negative. 

For example, yield farming can mobilize otherwise idle tokens, potentially generating passive income for their holders. 

On the other hand, negative possibilities range from crisis events such as price crashes or exploits that manage to trick the smart contract and reap gains from collaterals. DeFi isn’t regulated and doesn’t come with the legal protections that come with more centralized financial institutions. 

For instance, DeFi tokens are not considered securities, and the US Securities and Exchange Commission hasn’t taken any decisive actions against them. 

While some yield farming projects are well-established and draw in the bulk of collateral, new DeFi algorithms are constantly popping up. Some DeFistartups use copied and unaudited smart contracts, posing risks for unexpected operations and effects. The YAM yield farming project, for instance, has recently crashed, taking some of the market collateral with it. 

In August 2020, the WAVES platform expanded into DeFi. A long list of former ICO tokens that were repurposed for various forms of DeFi, starting with BAT, LINK, 0x, Kyber Network. Yield farming is a mercenary-like approach to cryptocurrency, where risk-takers seek out the highest yields, causing token price volatility along the way. Many DeFi projects are still in their nascent phases and can be rather difficult to understand, yet many newcomers are rushing in to get a piece of the pie. We advise our readers to do their own research into the intricacies of each platform– don’t lock in any funds you can’t afford to lose.

The post What is DeFi Yield Farming? A Beginner’s Guide on the Risks and Rewards of Earning Yield in Crypto appeared first on CoinCentral.