Learning the friendly way

Risk management involves identifying and analysing the risks involved, and then choosing whether to accept this risk or make changes to avoid the risk. This process is one we carry out daily, from crossing the street to engaging with a stranger, however, in this realm we’re looking at it from a finance/investment point of view. 

If you have a fund manager or financial adviser, they will generally be responsible for calculating and communicating the risks associated with any type of investment. This will cover the potential returns as well as the potential risks to your capital. 

For example, investing in an emerging asset will hold a lot more risk than buying the stocks of a well-established institution. It’s worth noting that high risk doesn’t necessarily equate to a negative, typically assets with higher levels of risk bring about higher levels of return (high risk, high reward).

Each person’s level of risk will vary from one to another and should be decided prior to making any investments. Once this is established, your investment portfolio will work within those realms so as to manage that level of risk. 

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A common go-to for investors looking to diversify their crypto portfolios, Ripple is arguably one of the most interesting cryptocurrencies. With plenty of controversies and headline visibility, Ripple is pioneering a new path for cryptocurrencies and receiving as much acclaim as it is backlash. Let’s explore what is Ripple (XRP) and why it’s often caught in the spotlight.

What Is Ripple (XRP)?

When understanding what Ripple is it is necessary to understand the three pillars:

1. Ripple Labs is the company managing the various products available.
2. RippleNet is the network that facilitates global payments between financial institutions that operate on top of the distributed ledger database called XRP Ledger.
3. XRP is the cryptocurrency fueling the network and providing a more cost-effective and faster means of transacting money.  

In essence, Ripple is a digital payments platform that facilitates faster and cheaper international payment settlement, remittance systems, and asset exchange. The company provides several products catering to a wide range of financial institutions, essentially building a bridge between the blockchain world and the traditional financial sector. 

Ripple is not based on blockchain technology, and instead uses proprietary distributed ledger technology. It was designed to provide a digital monetary payment alternative to the likes of SWIFT, catering to international and remittance markets.

What is XRP?

Launched in 2013, 100 billion XRP were minted and to date 52 billion are in circulation. These coins remain in the custody of the company and are released into the system gradually (using a different mechanism to mining). 

While XRP is the native coin to the XRP Ledger, the distributed ledger technology can facilitate transactions in multiple currencies. XRP is used to provide a quick conversion between currencies.

History of XRP

Ripple was first conceived as an online payments company in 2004 by Ryan Fugger in Vancouver. Several years later and with the advent of cryptocurrencies, two developers approached Fugger to merge their concepts and create a cryptocurrency of their own. As a result, OpenCoin was established in 2012 by Chris Larsen and Jed McCaleb, with Fugger on the team. 

In September 2013, OpenCoin became Ripple Labs, which was later rebranded to Ripple in 2015. A year later, the company received one of four Bitlicences, a licence required by the state of New York to provide virtual currency activities.

How does Ripple work?

Ripple uses a more complex means of maintaining the network, dissimilar to how other cryptocurrencies like Bitcoin and Ethereum operate. The RippleNet’s ledger is essentially maintained by the XRP community and can process transactions every 3-5 seconds. 

The network is made up of independent validator nodes which verify transactions through a consensus. These nodes are typically made up of a long list of financial institutions, universities and companies outside of the blockchain realm. 

The payment system provides products and services to payment companies around the world and has been integrated into banking systems to improve outdated fiat processes. 

For instance, Ripples’s xCurrent technology was used to launch One Pay FX, a mobile app for international payments from the Spanish banking group Santander. It was also used to power MoneyTap, a mobile app in Japan that effectively connected 61 banks on a mobile app to facilitate domestic payments. Ripple’s products are consistently being implemented around the world. 

Ripple and the SEC

In 2020 one of the biggest lawsuits in the crypto world was ignited when the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and two executives claiming that they violated investor protection laws. The SEC barred all US exchanges from trading XRP immediately, and a lengthy court case began. 

The court case revolves around whether Ripple is a security, with the SEC claiming the company unlawfully raised $1.3 billion in an unregistered security offering. As the case continues, each party has had their fair share of triumphs and blows, and the case is set to create a precedent for future cryptocurrency trials of similar nature.

This landmark case has been significant in the crypto world due to its potential implications for other cryptocurrencies. If the SEC's view that XRP is a security, rather than a currency, prevails, then other digital currencies could also potentially be classified as securities, subjecting them to additional regulation.

In a recent ruling in the three year case, the U.S. District Judge Analisa Torres ruled that XRP was “not necessarily a security on its face,” partially contradicting the SEC’s claims, and that the company did not break federal securities laws by selling XRP on public exchanges.

The recent decision made by Torres marked the first major triumph for a cryptocurrency firm in a lawsuit filed by the SEC. However, it is important to note that the SEC also achieved a partial success in the case with the judge stating that a portion of the token sales to institutional buyers did qualify as securities transactions.

While the SEC reviews the rulings, Ripple Chief Executive Brad Garlinghouse said that the ruling was "a huge win for Ripple but more importantly for the industry overall in the U.S." 

Ripple vs Bitcoin

When comparing XRP with the first and biggest cryptocurrency, Bitcoin, one must understand their different use cases.

Bitcoin was designed to provide the world with a digital peer-to-peer payment system and store of value while XRP was designed to facilitate international transactions providing a faster and cheaper alternative to fiat transactions. 

While Bitcoin was created to be decentralized and exempt from government and banking controls, Ripple is designed to include the centralized banking sectors in the benefits of the cryptocurrencies and provide them with the services to facilitate these benefits. 

While Bitcoin uses the process of mining through a Proof-of-Work consensus, Ripple uses a network of validators that are established outside of the cryptosphere. Its consensus system is designed to make transaction verification faster and, in the process, uses less energy.

How to tap into XRP

If you’re interested in incorporating XRP into your crypto portfolio, you will need to acquire XRP and possess a digital wallet for storing the cryptocurrency. The Tap app offers a convenient solution to buy, sell, and store XRP. Users can tap into Ripple using Tap and securely store the cryptocurrency within the app's designated wallet.

Formerly called the Matic Network, Polygon was created as a scaling solution to improve on some of the problems (including transaction price) within the blockchain network. Currently sitting within the top 20 biggest cryptocurrencies based on market cap, Polygon has caught the attention of many crypto enthusiasts. In this article, we explore what Polygon is and discover the services and use cases associated with MATIC.

By providing a framework for generating scaling solutions that are compatible with Ethereum, Polygon aims to guide that future closer to reality. The team has announced the launch of a Proof of Stake sidechain, which has already attracted some interest among the Bitcoin, decentralized apps, and cryptocurrency communities.

The much-anticipated Ethereum scalability roadmap is now coming into force, and the Polygon initiative is one of them helping to achieve this. Let's take a closer look at the platform.

What is Polygon (MATIC)?

The Polygon network enables the development of Ethereum-compatible blockchain networks and scaling protocols. Polygon is more of a protocol than a single solution. This is why one of the ecosystem's primary products is the Polygon SDK, which allows developers to create these Ethereum-compliant networks. Designed as a modular, flexible second layer, the network aims to expand Ethereum in terms of size, efficiency, usefulness, and security and in turn transform it into a full-fledged multi-chain system. 

Polygon uses a Proof-of-Stake consensus mechanism combined with the Plasma Framework. The Plasma Framework facilitates the execution of scalable and autonomous smart contracts, as proposed by Ethereum founder Vitalik Buterin. 

Through the platform's intricate technology and architecture, Polygon can process up to 65,000 transactions per second and execute block confirmation in less than two seconds. While Polygon is currently only interoperable with the Ethereum network, in the future it aims to support several other top blockchain platforms. 

Who founded Polygon / Matic?

The network was created by blockchain developers Jaynti Kanani, Sandeep Nailwal, and Mihailo Bjelic all with extensive experience building with Ethereum. The other co-founder, Anurag Arjun, is the only founding member to come from a non-programming background and serves as a business consultant and product manager.

After a successful ICO in 2017 and 2019, the team raised over $5.6 million. The Matic Network was later launched in 2017, before undergoing a rebranding in 2021 to the Polygon network as it is known today.  

How does Polygon work?

Polygon is a multi-chain platform that makes use of a network of side chains to facilitate transactions in an effective and cost-efficient manner. Bound to the Ethereum blockchain, Polygon can handle many different protocols, including the recently popular DeFi movement.

Polygon has similar functionality to other blockchain platforms like Polkadot, Cosmos, and Avalanche.

Through the platform, users are able to build Ethereum-compatible decentralized applications (dapps) using sidechain architecture and connect them to the main blockchain.

Through the PoS mechanism, users are able to stake MATIC in order to validate transactions as well as vote on network upgrades. The platform also uses a process known as PoS 'checkpointing' which revolves around a select team of block producers being appointed to each checkpoint by the stakers on the network.

These producers enable the platform to create blocks at a rapid pace as well as maintain decentralization by delegating PoS checkpoints to the main Ethereum chain. Block validation happens when periodical proofs of blocks are published by the block producers.

The Polygon network allows you to execute almost all of the same functions as Ethereum, but with fees that are significantly lower.

What is MATIC?

Matic is the native cryptocurrency to the Polygon network and gets its name from the platform's former name. MATIC is a utility token centred around providing governance rights and securing the network, as well as being used for staking and gas fees on the platform. 

As a sidechain, it runs parallel to Ethereum. It's used for fees, staking, and more. Polygon is a "layer two" or "sidechain" scaling solution that runs alongside the Ethereum blockchain - allowing for speedy transactions and low fees. The end goal of Polygon is to achieve millions of transactions per second.

The Polygon Network uses its own cryptocurrency, MATIC, to pay fees on the network, for staking, and for governance (meaning holders of the token get to vote on changes). The acronym MATIC is derived from Polygon's earlier days. Polygon was launched as Matic Network in October 2017, but developers changed their name to Polygon in early 2021.

Polygon's MATIC token is an ERC-20 standard utility token based on Ethereum. The token allows for low fees and instant transactions, just like the rest of the Polygon ecosystem. The maximum supply of MATIC is 10 billion coins, with new coins released into circulation on a monthly basis. At the time of writing roughly 70% of this total supply has entered circulation with all coins scheduled to be released into circulation by December 2022, according to the official schedule. With a maximum supply capped at 10 billion, this is making MATIC deflationary.

What factors can affect the price of Polygon (MATIC)?

There are several factors affecting the price of the Polygon token, MATIC. The most pressing factors are the demand for the token (people buying and selling the cryptocurrency) and the number of users looking to participate in staking.

Other factors include the general crypto-economics, the market sentiment, the project's fundamental and technical developments, the news surrounding both the MATIC market and cryptocurrency market in general, and how actively the token is traded on exchanges. Regulation announcements also typically affect the price of cryptocurrencies and should be monitored accordingly.

We’ve covered what Proof of Work and Proof of Stake is, but what is PaaS?

In this article, we’re making this rather complicated-sounding term easy to understand as we explore where it came from, what it means, and why it’s likely to keep popping up in the crypto realm. 

What Is PaaS?

PaaS stands for Platform as a Service and refers to a cloud delivery service that uses third-party cloud service providers. “As a service” indicates that the cloud computing service is provided by a third party, rather than the user having to manage their own hardware and software.

PaaS providers offer a range of services, including operating systems, databases, middleware, and other software development tools. PaaS offerings can be used for both cloud-native and hybrid cloud applications.

PaaS solutions are popular among software developers and businesses looking to migrate their applications to the cloud. They provide an application development platform that can be used to build and deploy applications quickly and easily, without the need for specialized hardware or software.

Some of the key benefits of PaaS include reduced costs, faster deployment, and greater flexibility and scalability. PaaS providers offer a range of services, including operating systems, databases, middleware, and other software development tools. This allows users to develop, run, and manage applications without having to worry about the underlying infrastructure.

The History of PaaS

PaaS first appeared in 2005 as Zimki under the company Fontago. Zimki allowed users to build and deploy web services and applications through its code execution platform.

Billing was determined based on the number of JavaScript operations, the amount of web traffic and the total storage used, providing users with a much clearer cost structure than on other platforms. The platform was eventually shut down in 2008 by its parent company.

That same year the Google App Engine was launched allowing users to create web services and applications using languages like Go, PHP, Node.js, Java and Python.

Today, Google remains the biggest PaaS vendor in the world. 

How Does PaaS Work?

Instead of replacing its overall IT infrastructure and running these services in-house, PaaS streamlines access to its key services. This helps to reduce time in deployment as well as minimize startup costs. 

PaaS allows users to tap into resources and functions like capacity on demand, data storage, text editing, vision management and testing services despite being in geographically different locations. All while using a pay-per-use model. 

PaaS Offers Development Tools

PaaS, or Platform as a Service, is a cloud-based platform that provides users with access to the tools and resources needed to develop and run applications. Instead of replacing its overall IT infrastructure and running these services in-house, PaaS streamlines access to its key services, allowing users to easily tap into resources and functions like capacity on demand, data storage, text editing, vision management, and testing services. This pay-per-use model enables users to access the tools and resources they need without incurring the high costs of building and maintaining their own infrastructure.

PaaS technology offers a range of benefits for both developers and businesses, including the ability to easily integrate databases, manage infrastructure, and access data centers. This can provide a range of advantages, such as improved performance, enhanced security, and increased scalability.

PaaS technology providers also offer a range of services and support to their customers, including integration platforms and infrastructure management services. This can help businesses to quickly and easily integrate their applications with other systems and platforms, allowing them to take advantage of the benefits of PaaS without having to worry about the underlying infrastructure.

PaaS vs IaaS vs SaaS

PaaS, IaaS, and SaaS are all different models of cloud computing. PaaS, or Platform as a Service, provides access to the tools and resources needed to develop and run applications, while IaaS, or Infrastructure as a Service, offers access to the underlying infrastructure, including storage, networking, and computing power. SaaS, or Software as a Service, provides access to software applications over the internet.

These models differ in terms of what areas are handled on-site and which are handled by a third-party provider. For example, with PaaS, the infrastructure and operating system are managed by the provider, while the customer focuses on developing and deploying their own applications. With IaaS, the provider manages the infrastructure, while the customer is responsible for the operating system and applications. With SaaS, the provider manages everything, including the infrastructure, operating system, and applications.

Examples of companies that offer PaaS services include Amazon Web Services and the IBM Cloud, while IaaS providers include AWS, Microsoft Azure, and Google Cloud. Dropbox, Salesforce, and Google Apps are examples of SaaS providers.

These models offer advantages to businesses and developers looking to enter the cloud computing space. For example, PaaS offers the ability to focus on app development without worrying about the underlying infrastructure, while IaaS and SaaS provide access to cloud resources and the ability to quickly deploy and scale applications. These models can also be used to build communications platforms and other mobile applications, providing access to the necessary infrastructure and resources.

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PaaS Provider In Blockchain

The use of PaaS technology, or Platform as a Service, within the blockchain industry is becoming increasingly popular. While blockchain platforms themselves are not typically structured in a PaaS way, the concept of BPaaS, or Blockchain Platform as a Service, offers businesses and enterprises the opportunity to focus on the development of software and other services for customers.

BPaaS provides numerous advantages for companies looking to enter the blockchain space. It allows businesses to leverage the power of cloud-based infrastructure and resources to develop and deploy applications without the need to manage their own hardware and software.

PaaS providers like Amazon Managed Blockchain and the IBM Blockchain Platform are leading the way in offering BPaaS solutions to businesses. These platforms offer a range of tools and resources for application development, including integrated development environments (IDEs), code libraries, and APIs. This allows developers to focus on building and deploying their own blockchain-based applications without worrying about the underlying infrastructure.

Overall, the use of PaaS in the blockchain industry offers numerous benefits, including reduced production costs, streamlined deployment, and the ability to easily integrate specific AI capabilities into applications. This makes it an attractive option for businesses looking to enter the blockchain space.

Overexposure is a common pitfall in trading, which occurs when a trader invests too heavily in a single asset, exposing themselves to a significant amount of risk. If the asset does not perform as expected, the trader's entire portfolio can suffer significant losses.
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To mitigate the risks of overexposure, traders can employ a strategy known as diversification. This involves investing in a range of assets across various industries and sectors, spreading out the risk and increasing the likelihood of positive returns. By diversifying their portfolio, traders can reduce the impact of a single asset's poor performance, as losses in one area can be offset by gains in others.
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Avoiding overexposure is an essential aspect of risk management, as it helps traders balance potential gains against potential losses. While it may be tempting to invest heavily in a single asset that appears to be performing well, this strategy can be risky, as even the most successful assets can experience significant losses due to unforeseen events or changes in the market.
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In addition to diversification, there are several other strategies traders can use to avoid overexposure. These include setting stop-loss orders, which automatically sell an asset if its price falls below a specified threshold, and regularly reviewing and adjusting investment strategies based on market conditions and performance.
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It is also important for traders to conduct thorough research before investing in any asset to ensure they fully understand the potential risks and rewards. By being informed and educated, traders can make more informed decisions about their investments and minimize the risks of overexposure.
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In conclusion, overexposure is a common risk in trading that can have significant consequences for a trader's portfolio. Diversification is an effective way to mitigate the risks of overexposure, and traders can also use other strategies such as setting stop-loss orders and regularly reviewing their investments.

MKR, the governance token fueling the network, comes from the same platform that created DAI, the algorithmic stablecoin soft-pegged to the US dollar. MKR serves both the decentralized autonomous organization, MakerDAO, and the software platform, Maker Protocol, both built on the Ethereum blockchain. These two platforms generate DAI and allow users to issue and manage the DAI stablecoin. 

What is Maker (MKR)?

Developed in 2015 and officially launched in December 2017, Maker is a revolutionary project that was built to host and generate DAI, a community-managed cryptocurrency that has its value soft pegged to the US dollar. The MakerDAO forms part of the larger Maker Protocol which allows DAI to maintain its value and operate without the need for a third party. The Maker Protocol requires both tokens to operate: DAI and MKR. 

To understand MKR, one must first be familiar with the DAI stablecoin. DAI serves as a loan option for borrowers, with the platform allowing users to take out a loan in DAI tokens by locking another cryptocurrency, such as ETH. When the borrower pays back the DAI that was borrowed, they are able to reclaim the collateral used for their loan. However, if its value drops below a predefined level it could automatically be sold off.

The Maker ecosystem is one of the first DeFi projects to enter the market, years before the movement took off. The DeFi sector revolves around providing decentralized financial products powered by smart contracts to the masses. 

Though the DAI stablecoin is best known as a service offered by the Maker Protocol, the MKR token is actually the crypto asset that secures changes to maintain its functioning. The governance token MKR gives holders voting rights over the Maker Protocol's development, such as what cryptocurrencies can be accepted as collateral and the price at which these assets will be sold if liquidation is to occur. The MKR price appreciates in value based on the success of DAI. 

The Maker protocol accepts a range of cryptocurrencies, including ETH, MANA, and BAT, as collateral.

Who created the Maker platform?

Established in 2015, the Maker Protocol was developed by a team of tech-savvy developers spearheaded by Rune Christensen. As time progressed, this collective eventually organized and formed into an official entity known as the Maker Foundation, a corporation located in the Cayman Islands.

In 2017, the Maker team raised a remarkable $12 million in funding by selling MKR tokens to some of the most influential venture capital firms at the time including Andreessen Horowitz, Polychain Capital, and 1Confirmation. A year later, another $15 million worth of MKR tokens were bought by Andreessen Horowitz, who expressed the intention to help govern the DAI system by participating in the MakerDAO. 

In 2019, the project raised another $27.5 million from venture firms Paradigm and Dragonfly Capital Partners for expansion to Asia. 

How does the Maker Protocol work?

When the Maker Protocol launched, 1 million MKR tokens were created. These tokens gave holders voting rights on key decisions through a process called Executive Voting.

First, the sentiment of MKR holders is measured on a new proposal through Proposal Polling before committing any changes to the software. The Executive Vote then takes place, and once the highest amount of MKR token holders commits to a proposal and the vote is passed, the winning proposal is implemented into the Maker Protocol. The number of tokens holds more president than the number of token holders, i.e. 10 holders with 1,000 tokens each will outvote 100 token holders with 50 tokens each. 

Non-MKR holders also have the opportunity to participate in the vote via threads in the MakerDAO forum however the MKR holders have the final say.

DAI Savings Rate

MKR holders also have a say in how much DAI holders can earn if they save DAI tokens on the platform, known as the DAI Savings Rate. In previous years this amount has varied between 0% and 8.75%. Following the recent market crash, MKR holders voted to make the DAI Savings Rate zero to encourage holders to sell their DAI and bring the price back into equilibrium.

When the DAI price drops below $1, MKR holders can vote to raise the DAI Savings Rate to encourage more users to hold DAI which increases the price.

What is MKR?

MKR is an ERC-20 token and acts as a governance and utility token to the Maker Protocol with no fixed supply. The token gains value as the use of the Maker Protocol increases as the supply is reduced when the Protocol is working effectively and increased when governed poorly. MKR tokens are created or destroyed through surplus auctions and debt auctions.

Surplus Auctions

The Maker system holds a Surplus Auction when the fees collected exceed an amount decided by MKR holders. DAI that surpasses this threshold must be purchased with MKR in order to settle the auction. This MKR is then destroyed reducing the total supply and thus increasing the token price.

Debt Auctions

Conversely, if the Maker system is underperforming its locked coins are sold for a lower value than before, causing it to raise capital via a Debt Auction. Through this process, new MKR tokens are created and auctioned for DAI. This in turn increases the MKR tokens and reduces the price. 

In this light, MKR holders are incentivized to keep the platform performing optimally in order for it to generate more fees and thereby reduce the MKR supply.

How can I buy Maker (MKR) tokens?

Anyone looking to add Maker MKR tokens to their crypto portfolio can securely purchase Maker tokens through the Tap app. The mobile app allows anyone with an account to conveniently and safely purchase cryptocurrencies through an effortless trading experience. 

Users can buy /sell Maker MKR tokens and safely store the tokens in the unique crypto wallet integrated into the app. Download the Tap app today to tap into the Maker ecosystem today.