Learning the friendly way

Imagine you have euros in your wallet but need to spend dollars at a store. You'd need to exchange your currency first, right? Wrapped crypto works in a similar way, but for blockchain assets.

Wrapped cryptocurrency is a tokenised version of another crypto asset that lives on a different blockchain. Think of it as your original crypto asset wearing an outer layer that lets it work on another blockchain network. For example, Bitcoin can't naturally function on the Ethereum network because they're separate systems with different rules. 

But by "wrapping" Bitcoin, you get a token that represents Bitcoin's value while being compatible with Ethereum's ecosystem.

This seemingly simple innovation has become a cornerstone of decentralised finance (DeFi), allowing assets to move between otherwise isolated blockchain ecosystems and unlocking billions of dollars in cross-chain liquidity.

How wrapped crypto works

The wrapping process involves three key elements: custodians, merchants, and smart contracts.

Here's how it typically works:

1. Deposit: You send your original cryptocurrency (like Bitcoin) to a custodian—an entity or smart contract that holds your assets safely.
2. Minting: Once the custodian confirms receipt of your deposit, they mint an equivalent amount of wrapped tokens (like WBTC) on the target blockchain.
3. Release: These newly created wrapped tokens are then sent to your wallet on the new blockchain, ready to use.

When you want your original tokens back, you simply reverse the process—a procedure called "unwrapping" or "burning":

1. Return: You send your wrapped tokens back to the custodian.
2. Burn: The wrapped tokens are destroyed (burned).
3. Release: The equivalent amount of the original cryptocurrency is returned to your wallet.

This process ensures a 1:1 backing between wrapped tokens and their underlying assets, similar to how stablecoins maintain their value through reserves. For every wrapped Bitcoin (WBTC) in circulation, there's one real Bitcoin held in reserve by a custodian.

Benefits of wrapped crypto

Cross-chain compatibility

The most obvious benefit is interoperability. Wrapped tokens allow assets from one blockchain to participate in activities on completely different networks. Bitcoin holders can participate in Ethereum-based DeFi without selling their Bitcoin, while Ethereum users can access the value and liquidity of Bitcoin without leaving their preferred ecosystem.

Expanded DeFi possibilities

Before wrapped tokens, assets like Bitcoin were essentially locked out of the booming DeFi space. Now, billions of dollars worth of previously idle assets can earn yields, serve as collateral for loans, or provide liquidity to trading pools.

Enhanced functionality

When assets like Bitcoin get wrapped as ERC-20 tokens on Ethereum, they gain new capabilities:

• Smart contract interaction: Bitcoin doesn't natively support complex smart contracts, but wrapped Bitcoin on Ethereum can interact with any Ethereum smart contract.
• Faster settlements: Bitcoin transactions typically take about 10 minutes to confirm, while Ethereum transactions complete in seconds or minutes, making wrapped Bitcoin potentially more practical for everyday transactions.

Liquidity boosts

By making assets usable across multiple blockchains, wrapped tokens significantly increase market liquidity. The same value can now participate in various ecosystems without being split across different platforms.

Common types of wrapped tokens

Wrapped Bitcoin (WBTC)

The most popular wrapped token by market cap, WBTC brings Bitcoin's massive value onto the Ethereum blockchain. Each WBTC is backed by one Bitcoin held in reserve. This has allowed billions of dollars worth of Bitcoin to participate in Ethereum's DeFi ecosystem.

Wrapped Ether (WETH)

Interestingly, even Ethereum's native currency (Ether) has a wrapped version. Why? The original Ethereum token (ETH) predates the ERC-20 standard that most Ethereum tokens follow. WETH makes ETH compatible with dapps that require the standard ERC-20 format.

Other Notable Wrapped Assets

As cross-chain functionality becomes increasingly important, we're seeing more wrapped versions of various assets:

• Wrapped AVAX (WAVAX) on Ethereum
• Wrapped UST (Terra stablecoin) on various chains
• Wrapped tokens of various layer-1 cryptocurrencies

How to use wrapped tokens in DeFi

Lending and borrowing

Platforms like Aave, Compound, and MakerDAO allow users to deposit wrapped assets as collateral to borrow other cryptocurrencies. This means you can leverage your Bitcoin holdings to access stablecoins or other tokens without selling your BTC.

Liquidity provision

Decentralised exchanges like Uniswap and SushiSwap rely on liquidity providers to enable trading. By providing wrapped tokens to these liquidity pools, users can earn trading fees and additional rewards.

For example, the WBTC/ETH pool on Uniswap has consistently been one of the largest liquidity pools, enabling billions in trading volume between Bitcoin and Ethereum.

Yield farming

Many DeFi protocols offer incentives for users who provide liquidity or lend assets. Wrapped tokens allow users to participate in these "yield farming" opportunities across multiple blockchains, potentially maximising returns.

Risks involved

Custodial risks

Most wrapped tokens rely on custodians to hold the original assets, introducing an element of centralisation and trust. If the custodian is compromised or acts maliciously, your wrapped tokens could become worthless.

For instance, WBTC relies on BitGo as its primary custodian. While BitGo maintains high security standards, this represents a potential single point of failure in an otherwise decentralised system.

Smart contract vulnerabilities

Wrapped tokens, like all blockchain assets involving smart contracts, face potential security risks. Bugs or exploits in the smart contracts governing wrapped tokens could lead to fund losses.

Minting and redemption friction

The process of wrapping and unwrapping tokens often involves fees, waiting periods, and minimum amounts. These friction points can make wrapped tokens less practical for smaller transactions or quick trades.

Bridge attacks

Cross-chain bridges, which facilitate the creation of many wrapped tokens, have been frequent targets for hackers. Several high-profile attacks have resulted in millions of dollars in losses.

The future of wrapped tokens

Decentralised wrapping mechanisms

The industry is moving toward more decentralised wrapping processes that reduce reliance on centralised custodians. Projects like tBTC and renBTC are exploring new models where custody is distributed among multiple parties or managed entirely by smart contracts.

Multi-chain integration

As blockchain ecosystems evolve toward greater interoperability, wrapped tokens are likely to play a crucial role in creating seamless experiences across multiple chains. Users may eventually interact with different blockchains without even realising they're using wrapped assets behind the scenes.

Standardisation and regulation

As wrapped tokens become more integrated into mainstream finance, we can expect more standardised practices and potentially increased regulatory attention, particularly around reserve verification and consumer protection.

Bridging the blockchain islands

Wrapped tokens have essentially built bridges between previously isolated blockchain islands, creating a connected DeFi landscape where assets flow freely across networks. They give users remarkable flexibility – allowing them to use Solana's speed while accessing Ethereum's rich application environment.

While these tokens solve major interoperability challenges, it's worth remembering their trade-offs. The centralized custody model goes against blockchain's decentralization principles, and security risks exist.

Though we'll eventually see more sophisticated cross-chain solutions emerge, wrapped tokens currently serve as the vital connectors powering our increasingly interconnected crypto economy.

‍

We’ve all been here: you land that dream job or get a nice raise, and suddenly your old budget feels unnecessarily restrictive. A few premium subscriptions here, some fancy dinners there, maybe a nicer apartment – before you know it, your higher income somehow feels tighter than before. 

Welcome to lifestyle creep, the subtle way our spending habits expand to match (or exceed) our growing income. It’s real, and it’s out there. Here’s how you can fight back. 

Why it happens

Lifestyle creep isn't just about splurging. Often, it's a series of small, seemingly reasonable upgrades. That $15 lunch delivery doesn't feel extravagant when you're having a hard day, and those $20 fitness classes are justified as a worthwhile investment in your health. 

The problem isn't any single expense, it's how these small changes compound over time, transforming from luxuries into what feel like necessities. And those small expenses can add up dramatically: an extra $50 per week on conveniences means $2,600 per year that could have gone toward retirement, a dream vacation, or your emergency fund. That’s a chunk of change in the end. 

Breaking the cycle

1. Find your motivation

Before making changes, identify why you want to control your spending. Maybe you want to switch careers, start a business, or build an emergency fund. Having a concrete “why” makes it easier to resist those immediate gratifications.

2. Audit your joy

Review your recent expenses and honestly assess which ones truly enhance your life. That streaming service you barely use? The subscription box that sits unopened? These are easy cuts. But don't stop at the obvious – examine everything, including your "necessary" expenses. Sometimes what we think we need is just habit in disguise.

Start doing this weekly, eventually moving up to monthly, until your inner accountant is completely satisfied with where your money is going. The idea here isn’t to strip all joy from your life, it’s merely to streamline it. 

3. Create friction

Make impulse spending harder:

• Remove saved payment information from shopping sites and phone settings
• Unsubscribe from marketing emails
• Establish a 48-hour waiting period for non-essential purchases

4. Address your triggers

Our spending habits are heavily influenced by our environment. Consider:

• Unfollowing social media accounts that trigger spending urges
• Finding free or low-cost alternatives to expensive social activities
• Being honest with friends about your financial situation and goals
• Planning social activities that don't revolve around spending

5. Regular check-ins

Schedule monthly "money dates" with yourself. Review your spending, celebrate wins, and adjust your strategy. Make it enjoyable – pour yourself a drink and put on your favourite record. This isn't about punishment, it's about alignment with your goals.

The mindset shift

Remember that reducing expenses isn't about deprivation, it's about choice and control. You might find that some lifestyle upgrades are worth keeping because they genuinely improve your quality of life. Others might be easy to let go once you realise they're not adding that much value.

The goal isn't to return to living like a college student. Instead, aim to be intentional about which upgrades you keep and which you can live without. This mindful approach to spending helps steer your money toward things that truly matter to you, rather than disappearing into a series of forgettable purchases.

By taking control of lifestyle creep, you're not just saving money – you're buying yourself options, flexibility, and peace of mind. And those are luxuries worth keeping.

‍

As the new year kicks off and the festive season's aftermath (and bills) hit, let’s tackle Januworry head-on with a solid plan. Ever felt overwhelmed by budgeting? The 50/30/20 rule might be your new best friend. Let's break down this simple but powerful approach to managing your money and get you on the right track for the next few months.

What is the 50/30/20 Rule?

Once all your deductions have been made, the 50/30/20 rule helps you divide your take-home pay into three simple categories:

• 50% for Needs
• 30% for Wants
• 20% for Savings and Debt Payment

The "50" - your needs (the must-haves)

Your biggest slice goes to the essentials. Here's what counts:

• Rent or mortgage payments
• Utilities (electricity, water, gas)
• Groceries
• Basic transportation
• Healthcare
• Minimum debt payments

Pro tip: If your needs exceed 50%, look for areas to trim – maybe a cheaper phone plan or a more affordable living situation.

The "30" - your wants (the nice-to-haves)

Budgeting does not equal starving. This is your fun money, and you deserve it! It includes:

• Dining out
• Entertainment
• Shopping for non-essential items
• Gym memberships
• Streaming services
• Hobbies

Remember: Just because you can spend 30% on wants doesn't mean you have to. You can use any “left overs” to boost your savings.

The "20" - your future (savings and debt)

This money builds your financial security:

• Emergency fund
• Retirement savings
• Extra debt payments
• Investment contributions
• Long-term financial goals

Quick tip: Pay off high-interest debt first – it's eating into your future savings.

Simple steps to get started

1. Calculate your monthly take-home pay
2. Do the math: multiply by 0.5, 0.3, and 0.2
3. Track your spending for one month
4. Compare your actual spending to the ideal percentages
5. Adjust gradually – Rome wasn't built in a day!

Common challenges and solutions

Not every budget looks the same, so if you're struggling to make the 50/30/20 budget rule work for you, here are some common problems:

• High debt load? Consider a 55/25/20 split temporarily
• Living in an expensive city? You might need to adjust the percentages
• Variable income? Use your lowest monthly income as your baseline

Bottom line

The 50/30/20 rule isn't about perfect math – it's about progress over perfection. Start where you are, adjust as needed, and celebrate small wins along the way.

Remember: This is a guideline, not a strict rule. Make it work for YOUR life and YOUR goals, and consult a financial advisor if needed.

‍

Before Bitcoin was launched in 2009, Satoshi Nakamoto designed the cryptocurrency to have a maximum supply of 21 million coins. As part of the greater plan, the number of new Bitcoin that enter circulation decreases at regular intervals, thus maintaining the total supply. These intervals are known as halvings, and affect everything from market value to investing strategies to potential profitability. Let's get into it.

What is the Bitcoin halving?

Roughly every 4 years, or every 210,000 blocks that are mined, the network undergoes a halving where the block reward for miners is reduced by 50%. This reward is earned by verifying transactions and adding a new block to the blockchain. 

The halvings process decreases the rate at which new Bitcoins enter circulation, gradually depleting the remaining supply until the final satoshi is mined, expected to be around 2140. After that, miners will solely rely on transaction fees as an incentive to validate blocks.

The most recent Bitcoin network halving took place in April 2024, when the mining reward was reduced from 6.25 BTC to 3.125 BTC.

Why does the halving occur?

The Bitcoin halving is pre-programmed into Bitcoin's core code and is not something that can be changed - it's set in stone. Designed to control and slow down the release of new Bitcoins over time results in fewer and fewer Bitcoin being minted after each halving event. 

This limited supply is a key part of what gives the digital currency its deflationary nature and potential for increasing value. As the supply is capped at 21 million, the dwindling new supply hitting the market reinforces Bitcoin's artificial scarcity.

Previous Bitcoin halvings

Below we look at previous halvings and how these affected the price of Bitcoin. Historically, 12 - 18 months after halvings, Bitcoin has reached a record high. While this is not the rule of thumb, it has certainly been witnessed. 

2009 - Bitcoin launches

Date: 3 January 2009

Block reward: 50 BTC

2012 - Bitcoin’s first halving

Date: 28 November 2012

Block: 210,000

Block reward: 25 BTC

Price before halving (November 2012): Around $12

Next all-time high after halving: $1,156 (November 2013)

2016 - Bitcoin’s second halving

Date: 9 July 2016

Block: 420,000

Block reward: 12.5 BTC

Price before halving (July 2016): Around $650

Next all-time high after halving: $19,891 (December 2017)

2020 - Bitcoin’s third halving

Date: 11 May 2020

Block: 630,000

Block reward: 6.25 BTC

Price before halving (May 2020): Around $8,800

Next all-time high after halving: $69,000 (November 2021)

2024 - Bitcoin’s fourth halving

Date: 19 April 2024

Block: 840,000

Block reward: 3.125 BTC

Price before halving (April 2024): Around $65,000

At the time of writing, next all-time high after halving: $99,655.50 (November 2024) 

Taking a look at the future dates, the next halving is expected to take place in 2028, when the block reward will be reduced to 1.5625 BTC. Thereafter, in 2032 and 2036. This will continue until all Bitcoins have been mined, which is expected to be in 2140. 

Potential impacts of the recent halving

The next Bitcoin halving event is expected to have several potential impacts on the cryptocurrency. First and foremost, it will reduce the supply of new Bitcoins entering circulation by 50%, substantially decreasing its inflation rate. This scheduled supply rate reduction enhances Bitcoin's hardcoded scarcity which could lead to increased demand if investors view reduced supply as more desirable. Higher demand coupled with tightened supply could potentially drive up Bitcoin's price.

However, the halving will also cut block rewards for miners by 50%, which could force some smaller mining operations to shut down if their expenses outweigh newly reduced revenues. This may result in mining becoming less decentralised as larger entities with greater economies of scale are able to continue operating profitably. This could lead to further consolidation of the mining hashrate among a smaller number of big players.

Regardless of price movement, the most recent halving holds significance for Bitcoin's disinflationary issuance schedule, which will continue until the final Bitcoin is mined around 2140. This systematically shrinking supply reinforces Bitcoin's key value proposition as a deflationary asset, with absolute scarcity built into its design. Understanding this info highlights why some investors see Bitcoin's scarcity as a central role in its potential long-term value.

How will the rest of the crypto market be impacted?

We can confirm that Bitcoin's halving creates a ripple effect across the entire cryptocurrency market. While it directly impacts Bitcoin, it can also cause broader market shifts affecting many altcoins as investors start adjusting their portfolios during this time, which can lead to increased volatility and capital moving between digital assets. 

Established cryptocurrencies like Ethereum often respond to Bitcoin's market changes, though their reactions aren’t always predictable. Smaller, less-known coins may face even greater uncertainty. Because crypto markets are so interconnected, even indirect effects from the halving can create big waves, making it a key event that influences the entire ecosystem.

Should I invest during a Bitcoin halving?

Sure, navigating Bitcoin halving speculation can feel like walking through a maze. Investors often debate the best timing - before, during, or after the event - but there's really no universal playbook. 

The cryptocurrency market moves in mysterious ways, influenced by countless global factors, and past halvings have shown dramatically different market behaviors, making predictions challenging. While some see these events as potential opportunities, others view them with caution. 

The key is understanding that no single strategy guarantees success. Individual research, a clear view of personal risk tolerance, and a broad understanding of market dynamics are essential for anyone considering involvement in this volatile landscape.

The bottom line

The Bitcoin halving is a highly significant event worth learning about as it enforces the cryptocurrency's hardcoded disinflationary monetary policy. While past halvings have led to powerful bull markets and substantial price appreciation, as illustrated above, it's important to understand that future price movements remain unpredictable and cannot be relied on. 

Bitcoin's value is influenced by a complex array of factors beyond just supply dynamics, including adoption rates, regulatory developments, and overall market sentiment. Though artificially constrained supply can increase scarcity, demand is ultimately the driving force behind long-term valuations. 

‍

‍

]

Let's be honest, entering the world of crypto can feel like trying to surf a tsunami while blindfolded. Especially during a bull market, when excitement is running high and everyone seems to be making money, it's easy to get swept up in the madness. We’ve all be there. But here's the deal: smart surfing is about strategy, not just catching the biggest wave.

What you need to know about bull markets

A bull market is crypto's version of spring - everything's blooming, prices are rising, and optimism is in the air. But just like spring can bring unexpected storms, the crypto market has its own unpredictable weather.

Do your homework (just do it)

Forget following random influencers promising overnight riches. The crypto world moves fast, and information is your best life jacket. Here's what to focus on:

• Research is your superpower: Dive deep into projects. What problem are they solving? Who's behind the team? What makes them unique?
• Understand the narratives: The crypto market loves stories. Right now, everyone's talking about AI tokens, decentralised infrastructure, and meme coins. Know what's trending, but don't just jump in blindly.

Build your crypto survival kit

Think of your crypto journey like preparing for an adventure:

1. Diversification is your friendsome text
   • Don't put all your eggs in one digital basket
   • Mix different types of cryptocurrencies
   • Consider a blend of established coins and promising new projects
2. Emotional discipline is your mentorsome text
   • FOMO (Fear Of Missing Out) is the crypto trader's worst enemy
   • Set clear goals and stick to them
   • Have a plan for both buying and selling

Spot the red flags and warning signs

Spotting the red flags

• Promises of guaranteed returns? 🚩 Red flag
• Projects with zero transparency? 🚩 Run away
• Everyone's talking about a coin, and you feel pressured? Take a breath

Risk management implementation

• Only invest what you can afford to lose
• Consider using strategies like Dollar Cost Averaging (buying small amounts regularly)
• Set up stop-loss mechanisms to protect your investment

The learning never stops

There’s nothing wrong with a long-term hodl plan. But if you’re looking to shake things up: stay curious, stay learning:

• Follow reputable crypto news sources
• Join community discussions
• Watch educational content from experienced traders

Always look beyond the hype

Look beyond price. Understanding blockchain technology, market trends, and the real-world applications of cryptocurrencies will make you a smarter investor.

Mindset matters

Remember, this isn't a get-rich-quick scheme. It's a journey of learning, strategy, and calculated risks. Some days you'll feel like a crypto wizard, other days like you're playing financial Jenga.

Pro tips from the crypto trenches

• Keep emotions in check
• Don't chase every shiny new token
• Learn from both your wins and losses
• Stay humble and curious

The bottom line

Crypto trading during a bull market is thrilling, but it's not a lottery. It's about informed decisions, continuous learning, and maintaining a level head.

Disclaimer: This guide is for educational purposes only. The crypto market is volatile, and past performance doesn't guarantee future results. Always do your own research and consider consulting with a qualified financial advisor before making investment decisions.

Stay smart, stay safe, and enjoy the ride! 

‍