The new crypto compass is here. From Coin of the Month, Cardano, to NFT art and the question of how crypto lending brings back interest – that’s in there.
Coin of the month: Cardano in the age of smart contracts
Finally done. ADA investors have had to be patient for this moment for six months since the last update, then things suddenly happened very quickly: On September 12th, Alonzo, the most drastic hard fork in the Cardano era, was carried out in the network. Since then, decentralized applications – dApps – can be developed on the network. The effects of the drastic update on the entire DeFi ecosystem can only be guessed at, but how much the crypto space was looking forward to this moment, could be read weeks earlier from the steep growth curve of the native crypto currency ADA. After the crypto market woke up from its summer consolidation, Cardano went in rapid succession: While the crypto currency was still fighting bitterly for the US dollar mark in July, it then swirled a cloud with a 190 percent increase in less than two months rose from the dust and finally hit a new record high of $ 3.10 on September 2, the day the last Alonzo Testnet went live.
Moritz Draht Cardano (ADA) takes a look back at the history of the protocol in Coin of the Month October. He says: “The Flippening course has been set, but now Cardano has to deliver.”
Crypto lending: How BlockFi, DeFi and Co. bring back interest
Some may still remember: interest. What seems like a relic from the distant past actually belongs to the basic equipment of economic thinking. The waiver of liquidity is remunerated. So if you put your savings in the bank, you can actually expect a risk premium, i.e. interest, for the associated risks.
Interest plays a major role in the financial world. Ultimately, the investor gets an impression of the risk of an investment: the greater the risk associated with an investment, the higher the premium. One also speaks of the so-called risk curve. At least in theory.
But the interest is broken. For example, if you have over 100,000 euros in German bank accounts, you will not be rewarded for it, but punished. Negative interest rates – actually an oxymoron in economics lectures – are not the exception, but the rule. The comparison portal Verivox lists a total of 389 German credit institutions with negative interest on savings. Most credit balances of EUR 100,000 or more earn interest at minus 0.5 percent, with many even starting at EUR 50,000.
But the interest is not lost. In the crypto space, he is making his way back into the mainstream. David Scheider and Moritz Draht show how you can benefit from it.
NFT: What to consider before investing
Since the hype surrounding NFT has sprouted countless projects in the past few months and the prices for individual NFTs skyrocketed, it is likely that many of the projects will soon be completely worthless. It is not easy to clearly differentiate between serious projects and attempts to get a lot of money quickly. Hence, from a buyer’s point of view, there are many questions to ask yourself before buying an NFT.
How do you find your way in such a dynamic, young and fast-moving ecosystem? What should you consider before buying? How do you know the data you’re using is reliable? It is difficult to keep track of the countless projects, which are joined by dozens of new ones every day.
In the latest edition of the Kryptokompass, our author Leon Waidmann therefore addresses the question of what you should definitely consider before buying an NFT in order to be successful.