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Token Daily Newsletter #21

PoW Chains In a PoS Year

Last year, many cryptocurrency investors dubbed 2019 the year of PoS chains, and they were accurate to an extent. PoS-based chains like Cosmos and Algorand launched, and Binance spun out Binance Chain, a chain optimized for decentralized exchange operations, which is also based on PoS.

Additionally, several Ethereum projects launched or announced their plans to launch a separate chain based on PoS, among them were: Loom (BaseChain), Dapper Labs (Flow), and Aragon (Aragon Chain). 

This wave of PoS chains has predictably been accompanied by a proliferation of Staking-as-a-Service (StaaS) providers which aim to facilitate delegating assets to leading validators. With this influx of PoS chains and StaaS services, many assumed the era of PoW-based chains was over.

But, the year is ending on a different note. The most recently launched mainnet chains are, in fact, based on PoW consensus. 

Early this month, Kadena launched its pre-mainnet network, a mainnet with limited functionality, using PoW consensus based on a variation of the Blake2s mining algorithm. The Kadena launch mechanism was uniquely interesting and will be detailed in one of our upcoming blog posts.

Similarly, Nervos launched its mainnet last Friday after a series of incentivized testnets. Nervos uses a new mining algorithm called Eaglesong.

Although there are several differences between the two projects, they share some interesting features:

1. Both projects opted to use ASIC-friendly mining algorithms. Blake2s and Eaglesong can both be efficiently parallelized, making dedicated ASIC miners and high-efficiency FPGA miners possible and desirable. Projects have come to realize that dedicated security through ASICs is, in fact, a feature - not a threat, as opponents of ASIC mining might have you believe.

2. PoW projects learned from the incentivized testnet approach pioneered by Cosmos. Incentivized testnets not only serve as efficient testing mechanisms but also as a 1) community bootstrapping mechanism and 2) an efficient token distribution tool to distribute tokens before network mainnet launch.

Ultimately, the launch of new PoW chains has shown that the debate around PoW and PoS is not settled yet. It also shows that there are still some projects that prefer "active" participation through running mining hardware as opposed to "passive" participation by delegating assets to a validator.



⚡️ Lolli Partners with Alibaba for Singles (11/11) day

On November 11th, (Singles Day), Lolli partnered with Chinese e-commerce giant Alibaba, which boasted $31 billion USD in sales during 2018 Singles Day. Lolli announced that beginning Singles Day, their users could earn up to 5% back when shopping with Alibaba online. A huge step for Lolli, and it comes as no surprise as the team was recently named to CNBC’s 2019 Upstart 100 list - the only bitcoin company listed.

⚡️ Polar 

Lightning app devs can now create regtest Lightning Networks in just a few clicks via Polar.

⚡️Jack globalizing bitcoin meet-ups

Jack, CEO of Square and Twitter, is traveling around Africa with a few execs from the Twitter team, along with his 4m+ followers on Twitter. Jack has attended multiple informal Bitcoin meetups in several African countries, including Nigeria, a country we focus on in issue #20 which offers insight into Africa’s rising economy, falling fiat currencies, and burgeoning crypto ecosystem.



🔹  SAI, DAI, DSR, and Vault 🤯

With MakerDAO's upgrade to multi-collateral DAI (MCD) scheduled for tomorrow (Nov 18th), there are many changes afoot. The DAI we know will be called Single-Collateral DAI (SAI). The original term 'DAI' will be reserved for the multi-collateral DAI. And to make things more confusing, CDPs will be renamed as Vaults. Additionally, a new interest rate for holding DAI will be referred to as DAI Saving Rate (DSR).

🔹 oTokens: DeFi Insurance To Protect Users 

DeFi offers investors multiple ways to earn meaningful interest on their cash. However, for these investors, DeFi is too risky. Enter: insurance solutions. This is exactly what the Opyn team provides through the Convexity Protocol and oTokens.

Investors can buy options to mitigate risks such as DAI breaking its peg or DeFi smart contracts being compromised. Insurers can now start offering their services in the new DeFi ecosystem and earn premiums for their services. 



💰  Messari, ChiperTrade and the Continuous Growth of the Data Sector

More validation of our thesis on crypto data industry: this week, two data companies hit the front page of crypto news.

Messari announced closing a $4M financing round led by Uncork Capital. Messari has been a strong advocate of transparency in the crypto ecosystem and as a business is building data tools to help investors make sense of the crypto industry.

Additionally, The Block reported that the data analytics company CipherTrace is planning an IPO early next year to raise several hundred million to fund the company growing operations. 



Disclosure: Token Daily Capital and/or its partners may have exposure to some of the cryptocurrencies mentioned in this newsletter.

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