May 16th, 2023

What Investors Need to Know About BRC-20 Tokens

Previously, I have talked about Ordinal inscriptions and what it means for the future of Bitcoin. Here’s an update on the BRC-20 token.

BRC-20 is a new experimental fungible token standard designed for the Bitcoin blockchain, inspired by Ethereum’s ERC-20 token. In the last few weeks, you may have heard this term from your friends or seen posts on social media about BRC-20 memes and NFTs.

As of May 2, the combined market capitalization of over 8,800 BRC-20 tokens was $137 million, a remarkable 682% increase from $17.5 million just a week ago. But a week after, as of May 9, the market capitalization of BRC-20 Bitcoin tokens had exceeded $1 billion, and within the previous 24 hours, there was a total trading volume of $207.7 million. These tokens can be tracked on brc-20.io or traded on Ordswap. Some of them are also available on Gate. As more wallet providers and more centralized exchanges integrate, I believe there will be more movements within their ecosystem.

What is BRC-20?

This standard was created for the Bitcoin blockchain by an anonymous on-chain analyst called Domo. It is being used to issue and transfer fungible tokens on the Bitcoin blockchain. BRC-20 is similar to the ERC-20 token standard used on the Ethereum blockchain but specifically designed for Bitcoin. BRC-20 uses Ordinal inscriptions of JavaScript Object Notation to deploy token contracts and mint and transfer tokens.

BRC-20 tokens are stored on the Bitcoin base chain and built with the help of Ordinals and Inscriptions. An Inscription or Ordinal is a unique number attached to a specific piece of digital content, such as an image, video, or text, stored on the Bitcoin blockchain. Inscriptions are generated using a special protocol that ensures their uniqueness and immutability, making them valuable digital assets that can be bought, sold, and traded just like NFTs. These tokens can be attributed to satoshis and then traded or swapped with others, just like other tokens.

Adding on to the above points and to give some context, BRC-20 tokens were made possible by a loophole in Bitcoin’s 2021 Taproot upgrade, which allowed for the attachment of small amounts of arbitrary data to each transaction to limit the amount of data stored on the blockchain. BRC-20 tokens use this feature to add additional data to individual satoshis, which can then be used to create various types of assets and tokens.

How different are BRC-20 and ERC-20?

The BRC-20 token standard utilizes the proof of work (PoW) mechanism, while the ERC-20 uses the proof of stake (PoS) mechanism. PoW is a consensus mechanism in blockchain networks to validate transactions and add new blocks to the chain.

In PoW, miners compete against one another to solve complex mathematical problems using high-powered computational devices. PoS protocols are a class of consensus mechanisms for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency.

Unlike PoW, which relies on solving complex computational problems, PoS requires validators to stake a certain amount of cryptocurrency before participating in the consensus process. Validators are chosen based on the amount of cryptocurrency they have staked, with those who have staked more having a higher probability of being selected to validate transactions.

The significant difference between the two networks is EVM (Ethereum virtual machine) compatibility. The BRC-20 token standard does not support smart contracts, which limits the ability of developers to create different programmable tokens and financial products.

Understanding memecoins popularity

Due to the explosive growth of the BRC-20 token standard, particularly with the introduction of memecoins such as Pepe and Memetic, these coins are becoming increasingly popular on BRC-20. In just four days, the BRC-20 token market capitalization has soared from $95 million to $279 million, with over 13,530 tokens currently in circulation. The top five BRC-20 tokens, Ordi, Pepe, Piza, Memetic, and Moon, make up 86.55% of the total market capitalization.

Memecoins may be moving to BRC-20 due to the Ethereum network becoming congested by these coins. One notable meme token, Pepe, has contributed significantly to this congestion. BRC-20 tokens, which are an experimental token standard on the Bitcoin blockchain modeled after Ethereum’s ERC-20 tokens, enable developers to create and transmit fungible tokens through the Ordinals protocol. The rise of memecoins has made BRC-20 tokens more popular in the cryptocurrency community.

It’s important to note that the number of daily transactions on the Bitcoin network hit a new record of 682,000 recently, up from 250,000 daily transactions at the beginning of 2023. As a result, all BRC-20 transactions must take place on-chain, which has rapidly filled up the limited space in Bitcoin blocks. Due to memecoins and BRC-20s, Bitcoin and Ethereum fees have soared.

What to look out for on BRC-20

The surge in memecoins’ popularity on BRC-20 can be attributed to the explosive growth of the BRC-20 token standard and the congestion on the Ethereum network caused by memecoins. This is like teaser marketing in my point of view.

One of the primary use cases for BRC-20 tokens is in the area of decentralized finance (DeFi). BRC-20 tokens have found utility in decentralized finance applications like lending, borrowing, and yield farming. Unlike rigid Bitcoin, BRC-20 tokens are more flexible and can be used in various decentralized financial applications.

Another use case for BRC-20 tokens is peer-to-peer transfers. BRC-20 tokens utilize the Bitcoin network and can be moved between wallets on the network. The most basic thing one could do with a BRC-20 token is to transfer it to their peers as a representation of value. In the future, I would foresee that the demand for real asset tokenization on BRC-20 will continue to grow.

The development of BRC-20 tokens is continuing at a rapid pace, and it is likely that more use cases will emerge in the future. The impact of BRC-20 tokens has been significant, considering they began as an experiment. The tokens have exploded in popularity in the crypto community, and over 14,000 BRC-20 tokens are deployed on Bitcoin compared to an estimated 400 million on Ethereum. This means that there is still lots of room for growth.

Source: https://intpolicydigest.org/what-investors-need-to-know-about-brc-20-tokens/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

November 22nd, 2022

How many cronos tokens are there? CRO token circulation analysis

Crypto.com is one of the biggest crypto exchanges out there, however, recent negative sentiment and the collapse of the FTX crypto exchange have sent its native token, cronos (CRO), into a downwards spiral, forcing it to lose over 90% of its value from $0.8992 in November 2021 to $0.0698 a year later.

What are the latest token analytics suggesting, and how many cronos tokens are there?

What is CRO?

CRO is the native cryptocurrency of the Crypto.com chain and the Cronos EVM Chain. It was formerly known as the Crypto.org Coin before being renamed to CRO.

Crypto.com is a public, open-source and permissionless blockchain that aims to help drive the mass adoption of blockchain technology through decentralised finance (DeFi), payments and non-fungible tokens (NFTs). The platform has named itself as the “next generation public blockchain”.

The platform was co-founded in 2016 by Kris Marszalek, Rafael Melo, Bobby Bao and Gary Or and is now operated as a desktop and mobile application.

The Cronos EVM Chain is the first ever Ethereum-compatible blockchain that was built on Cosmos SDK technology. It is an open source, permissionless Layer 1 chain that aims to scale the DeFi, GameFi and overall Web3 communities by letting builders instantly port apps and crypto assets from other chains while benefiting from low transaction fees, high throughput and fast finality.

The CRO token powers the ecosystem and is used for staking, which grants users a number of rewards and helps maintain the platform’s security and decentralisation. The cronos cryptocurrency is also used to settle transaction fees on the Crypto.org Chain.

Latest CRO market news

2022 has not been the best year for CRO. The token has fallen by more than 87% from its all-time high of $0.8992 on 24 November 2021 to $0.1093 on 17 June 2022. The dip in the CRO price was heightened as Crypto.com announced on 1 May 2022 that it would be slashing staking rewards for all tiers of its VISA cards “to ensure long-term sustainability”, effective as of 1 June 2022.

Between mid-July 2022 and end of September 2022, Crypto.com has received a number of licence updates worldwide, including Italy, Cyprus, South Korea, Australia, Canada, the UK and France. In addition, on 12 October 2022 the firm said that Paris was established as its European Regional Headquarters and invested €150m (around $155m, as of 18 November) in France to support market operations.

Between 25 October 2022 and 28 October 2022, Crypto.com had signed three MOUs: one with the game software developing studio ACT Games; one with the city of Busan in South Korea to advance the blockchain industry; and one more with global content studio A Story to develop NFT collaborations.

However, amid all the positive news, Crypto.com has also been caught in an array of negative news. An article published on 6 October 2022 by Ad Age tech claimed that the platform had cut off deals with a number of big sports organisations, including the Los Angeles’ Angels City Football Club, the 2022 FIFA World Cup in Qatar and the online sports tournament host Twitch Rivals. The article cited unanimous former and current Crypto.com employees.

In addition, according to a series of Tweets by the article’s journalist Asa Hiken, between “June and August, 30-40% of Crypto[dot]com’s entire workforce left the company, per former and current employees. That’s 2,000+ departures — the vast majority of which were layoffs.”

The company did not address the reports.

Now, let’s take a closer look at how many cronos tokens there are now.

How many cronos tokens are there?

So, let’s have a look at how many cronos tokens are available in circulation as of 18 November 2022.

According to data provided by CoinMarketCap, the maximum supply of the cronos tokens is 30.2 billion, meaning that once the total number of cronos tokens in circulation reaches that value, new tokens can no longer be mined. The current circulating supply of the CRO coin surpassed 25 billion.

However, this was not always the case for the cryptocurrency.

When the cryptocurrency was launched in 2018, its maximum supply was fixed at 100 billion coins. But, in order for the Crypto.com network to become fully decentralised at Mainnet Launch, Crypto.com decided to burn 70 billion CRO tokens in what it called “the largest token burn in history”. This was announced by the platform on 22 February 2021.

The platform released a schedule which shows that an initial batch of 59.6 billion CRO tokens was burned on 22 February 2021. Meanwhile, 10.4 billion coins were locked in a smart contract and would be burned every month as they get unlocked. This was aiming to increase the cryptocurrency circulating supply from 24% at the time to over 80%.

The remaining 5.9 billion CRO tokens were distributed in the following way:

5 billion CRO were allocated to mainnet block rewards for Chain validators and delegators
0.9 billion CRO were allocated to the development of the Chain ecosystem

Of that 70 billion burned:

20 billion tokens came from the platform’s capital reserve
5.5 billion coins came from the platform’s community development
10.4 billion tokens came from secondary distribution and launch incentives
20 billion tokens came from ecosystem grants
20 billion tokens came from network long-term incentives

Who are the biggest CRO token holders?

Now that we have established how many cronos tokens are in circulation, let’s take a look at the biggest CRO token holders.

Data provided by etherscan.io showed that, as of 18 November, there were 281,902 CRO holders in total. The 10 biggest CRO holders collectively owned 92.54% of the total token supply in circulation, meanwhile the top 100 owned 95.93%.

The website noted that the top account holding the most CRO tokens in total was a Null Address owning over 77 billion coins, amounting to 77.89% of the total circulating supply. Crypto.com was also among the top CRO holders in the world, owning around 7 billion tokens or approximately 6.9% of the total supply.

Analyst thoughts

Anndy Lian, chief digital advisor at the Mongolian Productivity Organisation and author of ‘NFT: From Zero to Hero’ told Capital.com that while burning 70% of the then maximum CRO token supply was a good decision, doing so in 2021 was a “downside”.

“Personally, I would prefer them to burn and then buyback in stages of burning such a huge amount. The burn back then did make the market perceive that the remaining tokens have more value but that was short lived.”

Lian added that taking into consideration everything that has happened with the FTX crypto exchange in recent weeks, CRO holders are also getting anxious about the wellbeing of the Crypto.com platform, however, Crypto.com CEO Kris Marszalek’s live AMA session on YouTube on 14 November 2022 helped calm those worries down.

“Crypto.com is still facing potential bank run in my humble opinion. This to me is one of the biggest risks that CRO has a direct impact on.”

The bottom line

While knowing key info about the cronos tokenomics and circulating supply is important for accessing the project’s health, it shouldn’t substitute your own research. You should always conduct your own due diligence before trading, looking at the latest news, technical and fundamental analysis, and a wide range of analysts’ opinions before making any trading decision.

Keep in mind that past performance is no guarantee of future returns. And never trade or invest money that you cannot afford to lose.

Source: https://capital.com/how-many-cro-tokens-are-there-crypto-com-circulation-analysis

Anndy Lian

www.anndy.com

j j j

October 24th, 2022

Are Non-Fungible Tokens (NFT) Regulated? What Are The Concerns?

The hype around NFT has slowed down. It seemed like NFT was slated for explosive growth in 2022, being named “word of the year” and coming off a record-high volume in January this year. But as it turns out, that was the peak. Looking at Q3 2022 NFT trading volume around the top 8 chains. There is a 76.4% trading volume decrease from Q2 2022 to Q3 2022.

Since then, the trading volume has tumbled 83% from the start of the year, according to Footprint Analytics’s data on CoinGeco. Recent months have logged numbers lower than July 2021, right before NFT summer. Most notably, Ronin and Avalanche have fallen out of the Top 8, replaced by ImmutableX and Panini. Recent sports mania has spilt over to the NFT space, propelling Flow into the Top 3. Solana’s NFT ecosystem doubled its September volume while all its competitors faltered.

During this period of time, where the market is bearish, you will see changes. For example, in Q3 Magic Eden gains grounds on OpenSea dominance. Magic Eden was the only one that saw growth in September, doublings its month-on-month volume and dominance, while the rest of its competitors continued to slip further. Magic Eden (22%) has gained ground on OpenSea’s (60%) dominance, but it remains to be seen if it can sustain its current momentum.

Another factor in sustaining the current momentum is aligning with the regulatory norms. There is still disagreement over how to handle NFTs, which makes it difficult to set clear regulatory norms. NFTs can now be seen in one of three ways: as commodities, securities, or intellectual property. Let’s explore each interpretation in more detail.

Commodities

Commodities are defined by US law as reasonably interchangeable services, goods, and rights, including money and interest rates, that are traded as commercial articles. The Commodity Futures Trading Commission (CFTC) asserts that cryptocurrencies like Bitcoin and Ethereum, as well as renewable energy credits and other intangible assets, are included in the definition of commodity.

If we take NFTs, they resemble cryptocurrencies in several ways. They may be bought and sold and are based on blockchain technology. In addition, the CFTC emphasises price manipulation and commodities exchanges more than it does on underlying assets and issuers. The Commodity Exchange Act (CEA) may be implemented if it is decided that NFTs should be classified as commodities. The CEA’s rules on manipulative trading may be applicable in this situation.

Securities

Most NFTs with a single owner and only one unique asset are unlikely to be securities. However, under certain situations, they might. If an NFT possesses security-like characteristics or otherwise satisfies the Howey test, such as when money or another kind of compensation is invested with a reasonable expectation that gains will result from others’ efforts, then the NFT may be subject to US securities legislation. A case-by-case Howey analysis is essential to ascertain if a specific NFT is a security. NFTs may, however, violate securities laws in the following situations, depending on the specifics:

NFTs are pre-sales of digital assets intended to be used on a platform that has not yet been developed, with the sale’s proceeds going toward developing the platform;
Digital assets can be “pooled” or “fractionalised” (for instance, in the case of art, when creators pool resources and divide profits, or where several NFTs reflect different investors’ fractional ownership of a single asset);
NFTs are a license to a digital asset (like a song) and a portion of its earnings (e.g., a percentage of sales).

Intellectual Property

NFTs might be covered by intellectual property rights such as copyright, design patents, and trademark protections. As a result, buyers of NFTs should be aware of any associated intellectual property rights. In fact, the license that comes with many or even most NFTs merely allows the NFT buyer to use, copy, and display the NFT.

A clip of renowned basketball star LeBron James’ slam dunk is an excellent illustration. The video was made available as a limited-edition NBA highlight video collector. The NBA collectables are available for purchase and sale on the Top Shot NFTs market. The NBA owns the copyright, nevertheless, and the rules of its licensing agreement continue to apply to any purchased item’s replication.

However, while most NFT producers place limitations on commercial use, other authors grant NFT owners broader rights. Members of the Bored Ape Yacht Club (BAYC) have the right to use their “apes” for commercial purposes, which allows them to produce and market hats, T-shirts, mugs, and other items.

Brand owners should consider how current or upcoming design patents can protect against imitations or infringement in addition to trademark and copyright protection. Because they grant owners full ownership of an infringer’s profits rather than just the fraction related to the use of the design, design patents are important intellectual property protections compared to other IP rights.

Fraud Schemes

Despite being a relatively new idea, NFTs are already being utilised to commit numerous forms of fraud. Here, we go over some of the most prominent NFT-related fraud schemes that have occurred:

Tokenisation– The process of producing digital tokens that reflect ownership of physical assets is known as tokenisation. This happens when someone steals an artist’s creation without their consent and “mints” it to create an NFT.
Wash trading– This is the practice of users manipulating transactions by trading with themselves or others to feign large demand for an NFT, manipulate its price, or enhance its visibility.
Insider trading– The practice of using information that is not generally known to benefit personally from it. In recent high-profile situations, employees and executives of NFT companies and markets have engaged in behaviour that may be viewed as unfair or illegal. Various events generate negative press for these organisations. NFT insider trading regulations frequently forbid buying NFTs based on secret information. Similarly, multiple forms of trading in business NFTs that aim to inappropriately manipulate the perceived price or trading volume of such NFTs are prohibited.
Anti-Money Laundering– NFTs, especially those with large value, may occasionally be utilised to aid in money laundering. A study on how the art market aids in the financing of terrorism and money laundering was released by the US Department of Treasury. The study covered a variety of topics, including the dangers of financial crimes in relation to digital art and NFTs. The study discovered that the high-value art market has several intrinsic characteristics that could make it susceptible to various financial crimes.

To Conclude

As we can see, the market for NFTs is still growing, and it will take some time until an appropriate regulatory framework for NFTs is put in place. Having said that, governments all over the world have already begun the process of developing NFT norms and standards, proving that they are seriously interested in these digital assets.

Additionally, you should be aware that the phenomenal success of NFTs will undoubtedly result in fraudulent activities. For this reason, it is becoming more and more crucial to conduct your research before purchasing or investing in NFT collections or projects.

Source: https://www.benzinga.com/22/10/29371369/are-non-fungible-tokens-nft-regulated-what-are-the-concerns