Daily Digest 1/20
Insight on the top stories of the day. “Neither this post nor any other on cryptofal.com should be taken as financial advice. It is not.”
ADA Ecosystem Sees Huge Boost As First Decentralized Exchange On Cardano Finally Goes Live
Today is a special day for the Cardano ecosystem as SundaeSwap is releasing the beta version of its decentralized exchange. This opens the door for users of Cardano to swap tokens, add to liquidity pools, or make their own pools for people to borrow from. This would be Cardanos direct competitor to Uniswap on Ethereum.
The anticipation of this launch can be seen in ADAs price action over the last week or so. Since it was made public that SundaeSwaps beta was going live this week the price of ADA is up close to 10% in the last seven days while most of the crypto market continued to flounder in comparison. Crypto trader and analyst, Luke Martin, did bring up one thing that may be a drawback of the DEX.
“Unlike other L1s which optimize for speed & scalability at the cost of decentralization, Cardano defi apps are trying something entirely new: optimizing for backlog,” said Martin.
While most layer-1s like Ethereum are focusing on increasing their scalability to meet the tremendous amount of transactions that flood the network on a daily basis. It is not a bad thing that Ethereum is so popular but high traffic congests the network causing outrageously high fees at certain times. This is why plenty of new blockchains are transitioning to proof-of-stake just like Cardano.
The Cardano foundation noted that “Although we expect this backlog during the first days of the protocol, we’re very confident that the protocol can meet the normal day-to-day load once things settle down.” Cardano also has plans in place to, hopefully, release their own layer-2 scaling solution called “Hydra” later in the year. ADA is so far proving to be efficient with its fees and transactions but let’s see what happens once they are a full go and flooding with users.
Russian Central Bank Suggests Banning Cryptocurrencies
China is not the only country that is considering a ban on cryptocurrencies. The head of the Bank of Russias Financial Stability Department presented a paper that suggests banning the usage, trading, and mining of cryptocurrencies in the country.
The main reasons that they noted were that cryptos are highly volatile and are commonly used for illegal criminal activities. Money laundering and fraud have always been associated with cryptocurrencies since their use was made popular on the dark web. This does not make cryptocurrencies inherently bad it comes down to how people are using them.
Another reason that was cited was that putting money into cryptocurrencies takes money out of the national economy which would devalue the strength of the given countries dollar. The document had recommendations on new regulations and legislation that would completely prevent any type of crypto-related business in the country. Russia does not want its institutional investors to incorporate crypto into its financial sector so they are trying to discourage the use of them as a whole. Penalties for those conducting sales for goods and services in cryptocurrencies are also on the table.
Like China, Russia is also in the process of making its own CBDC for its ruble. If they do outright ban cryptocurrencies and launch their own CBDC then that would give them full capability to track every single person and transaction that happens in the country.
“I think we will publish a report on cryptocurrencies in the near future. This report will contain our approaches to the place for cryptocurrency we see in the Russian financial market,” said deputy chairman of the Central Bank. “I give a hint – we do not see a place for cryptocurrency in the Russian financial market.”
When you look at crypto news and crypto Twitter on a daily basis you forget that it is still new to the vast majority of people. One thing that reminds us of is when the internet first became a thing in the ’90s.
The websites were primitive and had very little use. Sending an email was mind-blowing to people just like sending money to a friend’s wallet address is now through MetaMask. We see what the internet has evolved into since its inception and it is not going anywhere.
Crypto is the “magic internet money” and it is going to continue to grow just like the internet itself has. Soon it will be more than just swapping tokens and 3D pictures of monkeys as the technology continues to evolve and more ideas flow into the space.