Category: Cryptocurrency News

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In an analysis, Anders Helseth, Vice President at K33 Research, has mounted a strong case against the viability of the Uniswap (UNI) token. His analysis pivots on the intriguing dynamics of the decentralized finance (DeFi) market, fundamentally challenging the current valuation and future potential of UNI. Helseth begins his argument with a seemingly straightforward question: “The Uniswap protocol generates significant trading fees, but will the UNI token ever capture its (fair) share?” His conclusion is emphatically negative. Is The Uniswap (UNI) Token Worthless? For context, UNI is a governance token for the Uniswap protocol, a decentralized exchange that earns a 0.3% fee on trades. However, as Helseth points out, the entire trading fee currently goes to liquidity providers, with UNI holders standing to gain only if governance votes permit fee dividends to UNI holders. Related Reading: Uniswap Delists HEX Token After SEC Deems It An “Unregistered Security” Even in a slow DeFi market, the fully diluted value of the UNI token is 15 times the annualized trading fees paid when using the protocol, currently around $6 billion. If the UNI token could capture all trading fees, it would arguably present an irresistible buy. However, Helseth makes a compelling argument to the contrary. “The UNI token currently captures 0% of the 0.3% trading fee, which entirely goes to liquidity providers,” Helseth says, emphasizing the token’s current lack of intrinsic value. The crux of his argument revolves around three players in the DeFi space: the users, the protocol (and hence UNI token), and the liquidity providers. According to Helseth, the interplay between these actors is detrimental to the UNI token’s potential for revenue generation. Helseth explains: The entire protocol can be exactly copied within minutes at virtually no cost. This argument implies that all the power lies with the liquidity providers in the fight for trading fees. The primary concern for users is liquidity and cost-effectiveness. If the same protocol can be replicated at a whim, users would inevitably gravitate towards the version with the most liquidity – to minimize slippage when executing trades. This dynamic significantly empowers liquidity providers who, unlike UNI holders, hold real, valuable tokens. Related Reading: Uniswap Launches UniswapX Protocol, Sparking 3% Surge In UNI’s Price In addition, even though switching to another smart contract may entail some costs, these are relatively low, reinforcing the bargaining power of liquidity providers. Concluding, Helseth states: “Given this relatively low cost of switching from the users’ perspective, we cannot conclude with anything else than that the power lies with the liquidity providers. Hence, even though the Uniswap protocol generates significant trading fees, we believe the potential for the UNI token to capture any of this revenue to be almost non-existent.” At press time, the UNI price stood at $6.19 after being rejected at the 200-day EMA yesterday. Featured image from Guarda Wallet, chart from TradingView.com

Bitcoin is not done with short-term BTC price downside, analysis predicts, with overall volatility still among its lowest-ever levels.

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A sequence of unfortunate developments has struck BALD meme coin enthusiasts, as the once-shining (no pun intended) digital asset has experienced a jaw-dropping 96% decline in trading volume.  The root cause of this worrying situation stems from the withdrawal of more than 6,000 Ether in liquidity from the meme coin’s smart contracts, an action that has cast a foreboding cloud over the asset’s prospects. Removing such a substantial amount of liquidity had an immediate and profound impact, triggering an abrupt and steep decline in BALD’s price. Related Reading: Kaspa (KAS) Takes Off With 23% Burst – What’s Fueling The Thrust? Currently, the price of BALD stands at $0.01101692, according to CoinGecko data. Within the past 24 hours, BALD has experienced a significant price decline of 57.31%. Explosive Rise And Suspicion Surrounding BALD Coin BALD coin underwent an unprecedented surge in value within a single day immediately after its launch. However, this meteoric rise was soon followed by a sequence of perplexing actions that cast a shadow of doubt over the project’s legitimacy. The vigilant eyes of the Onchain Intrigue Telegram Channel turned towards BALD’s wallet activities (see image below) after a sudden withdrawal of liquidity. This subsequent investigation brought to light a set of alarming indications commonly associated with a phenomenon known as a “rug pull.” Source: Onchain Intrigue Telegram Channel In the intricate world of cryptocurrencies, a rug pull constitutes a type of scam in which the creators or promoters of a token vanish after attracting investment, leaving participants high and dry with their funds pilfered. Rug pulls have earned a notorious reputation in cryptocurrency, particularly in decentralized finance (DeFi). These incidents transpire when developers execute an elaborate ruse, projecting an image of authenticity around their project, only to swiftly abscond after removing the liquidity, leaving investors in the lurch. Darkening Clouds Of Skepticism Compounding the unease, recent speculation has arisen linking BALD coin to Alameda, a prominent quantitative cryptocurrency trading firm. While these connections are yet to be substantiated, the mere existence of such ties threatens to deepen the ongoing crisis surrounding BALD. Bitcoin holds at $29K on TradingView.com This potential association also raises pertinent questions about the community’s trust in analogous projects, further amplifying the sense of uncertainty that shrouds the cryptocurrency landscape. Related Reading: Binance Coin (BNB) Price Gears Up For A 10% Upswing – Here’s How BALD seven-day price action: Source: Coingecko Meanwhile, after the troubles that hit BALD, there’s a new start in sight. A new BALD token has been introduced; this time, it’s designed with locked liquidity. This move is meant to bring back hope and trust to the project. It shows that the people behind BALD are determined to make things right and regain the confidence of those who believed in them. (This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk). Featured image from Yahoo Finance 

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