Tag: Cryptocurrency

Do you know why most people lose money in every new crypto project they invest in? The answer is not wrong purchase timing or bad market conditions; it is the lack of understanding of the project. If you want to understand a crypto project, one of the best places to start is by reading its whitepaper. But if you’re new to the space, whitepapers can be daunting. They’re often long and filled with technical language.

This guide will break down a crypto whitepaper structure step-by-step so that you can learn how to read through it like a pro and understand what causes projects to succeed or fail.

What Is a Cryptocurrency Whitepaper?

A cryptocurrency whitepaper is best described as a document that guides readers, prospective investors, and the general crypto market to the fundamentals of crypto projects or blockchain-based projects. It acts as an informational resource that projects use to introduce their ideas, discuss its capabilities and technical processes, explain how it works, and talk about how it will benefit both users of the platform and investors. 

While whitepapers vary in length and depth (depending on the project), they all provide essential details such as their purpose, goals, architecture, implementation plans, value propositions, and monetary policies. The flows in a whitepaper stem from easy-to-understand problems the project is solving to more technical and complex issues. The whitepaper outlines and simplifies these complex concepts by providing easy-to-comprehend diagrams and explanations.  

Therefore, reading through a whitepaper before investing in any cryptocurrency or blockchain-based product is recommended.

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Why Are Whitepapers Important in the Crypto Industry?

Below are three major reasons why a cryptocurrency whitepaper is important for every investor. 

Education

Cryptocurrency whitepapers are a highly valuable form of education for crypto users. These documents bridge the gap between vast amounts of technical information about a crypto project and the user, making it easy to understand complex ideas and protocols.

Whitepapers provide concise yet comprehensive overviews of cryptocurrencies and blockchain projects in a more digestible format. They are essential in onboarding new users into the space while helping them make informed decisions regarding investing or using related technologies.

Fast Fact: The Bitcoin whitepaper is a classic example of boiling down the most important information about the Bitcoin network and its characteristics into a 10-page document in the simplest way possible.

Cryptocurrency whitepapers are an invaluable source of accurate knowledge that users should regularly refer to when looking for reliable information about a project.

Investment

The crypto whitepaper has become an increasingly important tool in educating investors about the crypto project. Before committing to investing in any project, a smart investor must do extensive background research. The whitepaper is a great starting point for this due to its concise and no-nonsense approach to detailing the underlying technology.

Whitepapers can include information such as project roadmap and technical specifications essential for investors to understand before jumping into an investment opportunity. Additionally, having transparency about the project’s strategy can help reassure investors of their decision.

A crypto whitepaper overviews the project’s original goals and plans, helping potential investors make informed decisions regarding their portfolio.

Identifying Red Flags

A whitepaper is an invaluable resource for anyone looking to invest in cryptocurrency, as they provide vital insight into the workings of the project and its potential future. Whitepapers can help alert investors to any potential red flags, such as a lack of security measures or a proposed timeline that would be difficult to stick to.

Furthermore, reading and understanding a whitepaper’s contents can give you an idea of its technical knowledge and the team’s ability to deliver on what is promised. Reading through each of these documents is vital when considering investing in any digital currency. Not only do they provide essential information about what you can expect out of your investment, but they also warn investors against potentially risky investments.

While checking through the smart contracts of a decentralized application platform might be more technical, anybody who can read can know a project’s worth from the whitepaper. This is what makes whitepapers important to the cryptocurrency community.

Standard Whitepaper Components

• Abstract: Here, you’ll find an overview of the project and its goals.
• Introduction: This section introduces the project and provides some background information while introducing the problem that they are trying to solve.
• Technical Details: Here, you’ll find detailed information about the technology powering the project, including descriptions of protocol layers and consensus mechanisms.
• Tokenomics: This section outlines how tokens will be used, distributed, and valued within the project.
• Business Model & Use Cases: About how the project plans to create value for investors and other stakeholders, as well as any potential use cases or applications.
• Roadmap & Milestones: A roadmap is usually included that outlines the project’s key milestones and activities planned over time to reach them.
• Team & Advisors: Here, you can find information about the team behind the project – their experience, background, and involvement in similar projects in the past.
• Conclusion: This section should summarize the prior sections’ points, provide a clear call to action for potential investors, and stress how they intend to solve the problem stated.

How to Read and Understand a Crypto Whitepaper?

Reading and understanding a crypto whitepaper is no small feat, but with the right approach, anyone can do it. Whitepapers are technical and often dense documents, so it’s important to go in with an open mind and be prepared to do some research if you find yourself confused by anything. Here’s a step-by-step guide to help you understand a whitepaper.

Get to Know the Project

Many crypto projects exist without a clear goal in view. Before investing in any cryptocurrency project, read the overview of the whitepaper. Analyse its proposed purpose, goals, and use cases. Check how big the market opportunity is and who the existing players are in the space. Check if the project is doing anything better than its predecessors and if there are statistics backing its vision statements.

Examine the Team

Look into the team behind the project — their experience and involvement in similar projects can give insight into their capabilities and potential success. Pseudonymous owners are, more often than not, a big red flag, and unserious owners can put a dent in investors’ aspirations and their pockets. For example, in the Ethereum whitepaper, we can see how solid and amazing their team is, which increases the trust in the project.

Understand Tokenomics

Review the tokenomics to determine how tokens will be used, distributed, and valued within the project. Moreover, check if the solution the company is proffering needs the blockchain. If it does, is there a need for a crypto token? If yes, will the token appreciate in value? In what phases will the token be released? What will the token distribution be like? These questions can help uncover some hard truths from even good projects. 

Understand Regulatory Compliance 

Familiarize yourself with applicable regulations to understand what actions may need to be taken for the project to remain compliant with national laws or industry standards. Also, check if the project has legal standing in the country or zone they primarily operate in. 

Look at Roadmap & Milestones

Compare the roadmap against current market conditions to see if it is feasible for them to meet stated milestones on time and within budget. 

Major Red Flags to Avoid When Reading a Whitepaper

No Use Case

Many tokenized crypto projects have no reason to exist in the first place. They are just built on the premise of hopes and pump and dump. You don’t want to be at the receiving end of a crypto pump-and-dump scheme, so it is preferable to stay out of any project that offers hope without a practicable way of achieving those targets. 

Disoriented Team

A disoriented team can be a red flag in a crypto whitepaper, as it suggests a lack of clear direction and leadership within the project. This can lead to delays in development, miscommunication, and a lack of accountability.

Additionally, a disorganized team may indicate a lack of experience and expertise in the field, which can raise concerns about the project’s ability to achieve its goals. It’s important to research the team behind a crypto project before investing and to look for signs of a well-structured and experienced team.

Poor Language

Poor language in a crypto whitepaper can be a red flag for potential investors and users. If a whitepaper is poorly written or uses jargon that is difficult to understand, it can indicate a lack of professionalism and attention to detail on the part of the project’s developers. This can lead to concerns about the project’s ability to deliver on its promises and its overall credibility.

Additionally, poor language in a whitepaper can also indicate a lack of understanding of the technology behind the project. This can raise questions about the expertise and qualifications of the project’s team and whether they have the necessary knowledge and experience to develop and maintain a successful project.

Grandiose Promises

Grandiose promises in a crypto project can be a red flag as they may indicate that the project is not well-researched or that the team is more focused on making a quick profit rather than building a sustainable project.

These promises may include unrealistic returns on investment, overly ambitious timelines, or unproven technology. It is important to thoroughly research any crypto project before investing and to be wary of any that make grandiose promises. 

Absent Whitepaper

An absent whitepaper may indicate that the project is not well-planned or has not been fully developed. It also suggests that the team behind the project may not have the necessary knowledge or experience to execute the project’s goals. Without a whitepaper, investors and potential partners have little to no information about the project’s technical details, roadmap, and long-term vision. This makes it difficult for them to evaluate the project’s potential for success and make informed decisions about investing or partnering with the project.

Additionally, an absent whitepaper may also indicate that the project is a scam. Many fraudulent projects don’t have a whitepaper or have a poorly written one, as they have no intention of delivering on their promises.

Bottom Line

A crypto whitepaper is an essential tool for any serious cryptocurrency investor. By understanding what a whitepaper is, why they are important, and how to read one, you will be better equipped to make informed investment decisions in cryptocurrency.

Remember these key takeaways the next time you sit down to read a crypto whitepaper: look for clarity, assess the team’s qualifications, gauge the community reception, and pay attention to red flags. With this framework in mind, go forth and start reading some whitepapers and make this an integral part of your crypto research.

Why Is Aptos Growing in January 2023?

Aptos (APT) has been making headlines in the crypto space over the last week. The coin has rallied over 300% in just a few days, surpassing popular coins such as Solana (SOL), Ethereum (ETH), and even Bitcoin (…

VVS Finance, or Very Very Simple Finance, is an automated market maker (AMM) DEX and the largest project built on the Cronos blockchain, launched by Crypto.com in 2021.

VVS facilitates liquidity pools, swaps, and staking and offers an intuitive UI aiming to drive global adoption of DeFi. 

Read on for a deep dive into the VVS Finance protocol and its key features. 

What Is VVS Finance?

VVS Finance is a decentralized finance (DeFi) platform built on the Cronos blockchain. It was created to simplify the DeFi market for everyone and empower the masses to take control of their finances. 

To make DeFi more accessible to billions of consumers worldwide, VVS Finance offers fast transactions, minimal charges, and high potential earnings. The DeFi platform also intends to create passive revenue streams for users through various options, such as yield farming.

Definition: Yield farming is an investment strategy allowing users to lend their digital assets in exchange for benefits like interest or a share of the platform’s transaction fees.

Based on the Cronos blockchain, VVS Finance enables users to swap cryptocurrencies or stake their digital assets to provide liquidity in different liquidity pools. In exchange, VVS Finance allows investors to receive two-thirds of the collected swap fees. Similarly, the platform permits users to collect liquidity awards in the form of 0.2% of trading transaction fees.  

The use of the AMM protocol enables VVS Finance to provide incentives to users to ensure long-term sustainable growth. The platform focuses on making it simple for users to transfer tokens and receive dividends “while having fun.” VVS Finance emphasizes the “fun” aspect of DeFi to onboard as many users as possible, including those with little to no prior experience in blockchain and cryptocurrency. The VVS team believes the more users on the platform, the better value there will be for network participants. 

Who Created VVS Finance?

The VVS Finance team calls its members the “Craftsmen” – “Coming from a deep product design background, a team of humble farmers got together, determined to build DeFi products for our aunts and neighbors, to bring amazing protocols to the masses.” 

While staying anonymous, VVS Finance has successfully created several valuable partnerships with key strategic partners, such as the Crypto.org and Crypto.com ecosystems. 

What makes VVS Finance Unique?

VVS Finance’s unique selling points (USPs) include the following:

Bling Swap

Bling Swap is an algorithmic routing system that enables users to swap tokens across several liquidity pools to obtain a better price for the requested pair. Users can swap tokens for a small fee of 0.3%. 

Liquidity Provision

Users can become Liquidity-Providers (LPs) by adding tokens to a liquidity pool. As evidence of their share of the pool’s assets, each LP is given a CRC-20 pool token (LP token). To trade through their liquidity pools, users must pay swap fees to LPs.

• Liquidity providers get two-thirds of swap fees (0.2% of swap volume at launch);
• 0.1% of the swap volume at launch, or one-third of swap fees, is held in treasury.

The swap fees are kept in liquidity pools’ reserves. Users will receive their proportionate part in exchange for their share of the reserves when pool tokens are returned. 

Before choosing to contribute to a liquidity pool, LPs are advised to weigh the risk of impermanent loss against the anticipated share of fees and income because they may experience impermanent loss if the tokens’ prices decrease.

CRYSTAL Farming

LPs can stake their LP tokens in “Crystal Farms” to get VVS tokens as rewards. 

• View: Users can view the eligible pool, as well as the staked, earned, and APR percentages for each pool (accessible after Pioneer Farming Mode);
• Stake: Allows users to pay gas fees and quickly stake qualified LP tokens in a few clicks;
• Claim: Facilitates customers’ quick and easy claims of their accumulated VVS by paying gas fees;
• ROI calculator: Allows users to calculate their ROI by entering the stake amount, time frame, and compounding duration. (accessible after Pioneer Farming Mode).

Glitter Mining

The “Glitter Mine” allows non-LP users to stake VVS tokens and get VVS tokens or other partner tokens as rewards. In addition to the View, Stake, Claim, and ROI calculator features, users can also use auto-compounding, which allows users to activate the auto-compounding of staked VVS tokens for each user in the Auto VVS pool in exchange for VVS tokens. 

Initial Gem Offerings (IGOs)

Users can benefit from larger rewards and early access to Cronos ecosystem’s new projects through the VVS Initial Gem Offerings. They can buy the new projects’ tokens using VVS-CRO LP tokens by participating in one of the two sale options: basic sale or unlimited sale. Let’s explore their characteristics.

Basic Sale

• Users can commit VVS-CRO tokens up to a maximum determined amount (differs for each project, e.g., $100, $500 worth)
• No participation fees
• If there’s an overflow in the subscription, any unspent LP token will be returned.

Unlimited Sale

• No cap on the amount of VVS-CRO to commit
• The participation fee will decline based on the percentage of overflow. The initial participation fee is set at 1%.
• If there’s an overflow in the subscription, any unspent LP token will be returned.

Analytics

Analytics allows users to access the overall VVS Finance protocol’s per-token/pair data, including liquidity, trading volume, etc. Users can access the VVS protocol via a dedicated web interface and connect using the Crypto.com Wallet Extension or any mobile wallet that supports WalletConnect (available on the Crypto.com DeFi Wallet).

VVS Finance intends to provide native wallet integration with popular wallets and API access in the future.

Why Is VVS Finance Popular?

VVS Finance intends to simplify DeFi by offering a user-friendly interface, seamless swaps, liquidity pools, staking, fast and cheap transactions, etc.

A cryptocurrency project’s health is also evaluated according to the following criteria:

• Substantial market cap: In the first few months since its launch, VVS Finance’s market cap increased from $20 to $170 million and has mirrored the general market trend since then. 
• Reasonable trading volume: VVS Finance’s trading volume has primarily stayed within 5 and 20% of its market capitalization range. 
• Price action: The protocol’s VVS token’s price action is approximately as volatile as you would anticipate from a new DEX project and a new chain, but without strange pumps.

What Is VVS Token?

VVS is the VVS Finance protocol’s utility, reward, and governance token. The VVS token was created on the Cronos blockchain’s CRC-20 architecture. VVS adopts an emission model in which 50 trillion VVS will be created in the first year and half of that every year after that  (for example, 25 trillion in the second year), and the per-block emission is based on the chain’s technological design.

VVS tokenomics is as follows:

• 30% to farms and liquidity mining
• 23% to the team
• 15% to the community wallet for future initiatives
• 13.5% for network security and maintenance
• 13.5% for ecosystem development
• 2.5% to traders and referrers
• 2.5% to market makers.

In addition to the Cronos blockchain’s core VVS and CRO tokens, the protocol also supports USDT, USDC, SHIB, ATOM, and other tokens.

The VVS Finance team makes the current governance decisions in consultation with the community feedback; however, to fully decentralize the protocol, VVS Finance intends to hand the project over to VVS token holders gradually.

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How Many VVS Tokens Are in Circulation?

VVS’s total circulating supply is 2.2 trillion. Its total supply is over 36 trillion, increasing to 100 trillion over ten years through its emissions schedule. 

How Does VVS Finance Work?

VVS Finance focuses on tested and audited protocols. It provides a lucrative creative program supported by the native VVS Finance token (VVS). 

The protocol offers liquidity pools, each consisting of two tokens. Tokens are added to the pool by liquidity providers and then traded amongst traders.

The methodology is based on a formula for producing a consistent product. To clarify, after a swap is carried out, the sum of the quantities of both tokens in a pool stays the same. Additionally, the price slippage from the swap may differ according to the total number and distribution of tokens in the pool.

The stakeholders can profit from VVS Finance’s underlying mechanisms in the following ways:

• Liquidity providers (LPs): LPs receive 2/3 of the individual pools’ transaction fees. You will get VVS incentives for staking valid LP tokens under the “Crystal Farm” tab.
• VVS stakers: Stakers are rewarded in  VVS and partner tokens for staking VVS on the “Glitter Mine” page.
• Trading incentives: Rewards for trading tokens on VVS Finance are promised to users who swap tokens on the platform but have yet to be made public. Referral program: Users recommending others to trade on VVS Finance will receive benefits that have yet to be disclosed.

A sizable amount of the VVS supply is set aside for future community projects to ensure benefits for the  VVS Finance contributors and users.

Bottom Line

VVS Finance is built on the Cronos blockchain that facilitates cheap and fast transactions and leverages proven and audited protocols. It also provides a rewarding incentive scheme powered by the VVS Finance token.

The VVS Finance price prediction anticipated steady growth, drawing inference from its market capitalization moving from $20 to $170 million and then to $350 million in early April. If VVS Finance continues its steady growth, the protocol could retain its large market share on the Cronos blockchain.