Tuna Chain is a modular Layer 2 solution that functions on Bitcoin while also integrating with Ethereum. Learn more about how it works in this article.

 is rightfully known for its security through its use of 

 offers greater versatility. Until recently, blockchain projects had to choose between the two. Now, however, a hybrid solution is available that blends the benefits of both of these leading blockchains and takes a bold leap into the future.

 that functions on Bitcoin while also integrating with Ethereum.

) is strongly rooted in elevating the user experience (UX). Bitcoin is the most trusted cryptocurrency, largely due to the recognized strength of its security protocols. However, while it excels in security, it lacks the versatility that ultimately fosters innovation. In this regard, Ethereum is viewed as a superior blockchain. 

Tuna Chain’s modular Layer 2 solution works on Bitcoin through a 

 hybrid layer while offering Ethereum functionality. It uses 

-powered modularity to minimize transaction costs. At the same time, this modularity improves both trust and efficiency. Tuna Chain currently supports Solana, Ethereum and Bitcoin transactions. It works with Bybit, Phantom, MetaMask, UniSat Wallet and OKX Wallet.

Tuna Chain is a new project that was established by three unknown individuals, known under the names of Tuna Nigiri, Tuna Sushi and Tuna Sashimi. Each team member brings their unique experiences and knowledge with blockchain, cryptography and 

 to move Tuna Chain forward. Tuna Chain is financially supported by BSC News, Normie Capital, Serafund, ArkStream Capital, Cogitent Ventures, MH Ventures and other angel investors. After its Ocean Festival and Ocean Trio, Tuna Chain now has over 1.3 million wallets connected on the Tuna Chain Testnet, with a total 

The purpose of Tuna Chain is to bridge the gap between Bitcoin and Ethereum. Although Bitcoin’s chain boasts superlative security, it lacks the versatility that Ethereum’s 

 provides. As a hybrid Layer 2 solution, Tuna Chain’s primary goal is to blend the two. By doing so, its founders want to push the envelope on the future of blockchains and provide a better UX.

Tuna Chain’s functionality is based on three core features: the Toro native 

, Celestia-powered modularity and a hybrid ZK-OP layer. With the Toro stablecoin, users can purchase new digital assets through the overcollateralization of their BTC supply. Meanwhile, Celestia-powered modularity improves data availability, and the ZK-OP hybrid layer executes smart contracts with fast, secure transactions.

Rollup Solutions and Operational Mechanism of Bitcoin Layer 2

Layer 2 solutions similar to those found on Ethereum enhance Bitcoin's scalability, using technologies such as 

 (ZK). Tuna Chain enhances Bitcoin's transaction capacity by integrating optimistic rollup technology into its Layer 2 framework.

Securing Native Assets on Bitcoin: Leveraging Taproot's Upgrade

 upgrade into the Bitcoin network marks a significant advancement in the security of its native assets. This update incorporates advanced cryptographic techniques, such as Schnorr Signatures, MAST and Tapscript. To further secure these assets, Tuna Chain has implemented a multisignature security model and is exploring the addition of external validators to its network security protocols.

Tuna Chain processes transactions through a detailed system that begins with the precise arrangement and execution of transactions. These are then reliably recorded on 

's data availability layer and conclusively verified on the Bitcoin blockchain. Verifiers are essential to the chain's integrity, quickly producing fraudproofs to address any transaction discrepancies and ensure the network remains secure and reliable.

Tuna Chain is a next-level Layer 2 solution that moves blockchain into the future. Each of its core features provides unique benefits to support a superior UX. 

Tuna Chain uses Celestia-powered modularity to optimize its Layer 2 functionality. Specifically, this modularity is supported by Layer 2 data management that enhances trust, improves efficiency and reduces transaction fees.

The ZK-OP Layer is Tuna Chain’s hybrid Layer 2. This layer utilizes a dual-phase architecture that integrates Ethereum’s benefits with those of Bitcoin. By doing so, it empowers smart contracts and accelerates secure transactions.

 is a grand opening event celebrating Tuna Chain’s launch. During this grand opening, the first round of TUN tokens will be distributed. Distribution cap for this initial release is based on 

 growth driven by the community, and could range between 2% and 21%. The token supply increases by 2% as each new milestone is achieved.

, the setup experience for new community members, consists of Calm Waters, Whimsical Tides and Majestic Depths. With Calm Waters, new users can receive 60 points for following Tuna Chain on social media and linking their wallet. Additional points are available by referring friends to Tuna Chain. Whimsical Tides, the testnet phase, is still in development along with Majestic Depths.

In the first quarter of 2024, Tuna Chain successfully completed several milestones, including the launch of the Tuna Testnet — Alpha, Ocean Trio Points campaign, Ocean Festival (which highlights the TVL) and the rollout of the TunaChain Explorer. 

Moving into Q2 2024, progress is ongoing with significant developments. Tuna Chain’s team is currently deploying an optimistic rollup (OP)-based Mainnet, establishing a native bridge from Bitcoin to the Tuna Mainnet, launching a Mainnet decentralized exchange (

), and developing a modular data availability (DA) layer.

Tuna Chain functions with three primary tokens: TORO, TUNA and WOOG. Each serves a different and integral role.

TORO, Tuna Chain’s native stablecoin, helps users transform their BTC into their choice of high-yield digital assets. This is accomplished seamlessly and with full transactional stability. The user doesn’t need to liquidate the BTC to complete the transaction.

 of Tuna Chain, is used for various purposes, such as revenue generation, funding builders and contributors, benefiting token holders, incentivizing users and community members, and promoting community engagement within the Tuna Chain ecosystem.

TUNA has a total token supply of 210,000,000.

 token that acts as the primary ticket into the Tuna Chain ecosystem. Only 200 of 1,000 available WOOG tokens were distributed at the BRC-20 Launchpad event. The remaining WOOG will be distributed only when they’re activated by external forces.

Looking to get your hands on the TUNA token? Bybit will soon offer it via our 

In the meantime, you can also purchase TUNA through 

WOOG tokens grant access to the Tuna Chain ecosystem. Of the total supply of 1,000 tokens, only 200 are currently scheduled to be released. These tokens are exclusively available through the 

. There’s a purchase limit of one WOOG token. While 800 WOOG tokens will remain, they’re sealed, and their release isn’t scheduled. You must have an active Bybit account with a funded wallet to participate in the event. 

TUNA tokens play a fundamental role in governance of the Tuna Chain’s unique hybrid Layer 2 chain, designed to deliver the benefits offered by both Bitcoin and Ethereum. Tuna Chain is presented as the future of blockchain, and is poised to change the blockchain landscape in exciting ways, which could place a premium on TUNA tokens. 

As an investment, TUNA should be purchased conscientiously because the value of the tokens will decrease when additional tokens are released, even for a short period of time. In addition, all cryptocurrencies are speculative in nature, with a risk of partial or complete loss. Therefore, 

 cryptocurrencies before making an investment.

Tuna Chain is a hybrid Layer 2 solution that provides a much-needed service in the blockchain world. By bridging the gap between Bitcoin and Ethereum, it allows users to enjoy the best of both worlds. In doing so, it has the potential to move the dial forward significantly in blockchain technology. Moving forward, Tuna Chain is a platform worthy of attention.

Intermediate

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Tuna Chain (TUNA): Reinventing Bitcoin With a ZK-OP Approach

Notable Ethereum Spot ETF applications have come from high-profile issuers that received approval for Bitcoin Spot ETFs earlier this year. Learn more here.

The cryptocurrency landscape could be on the brink of a major shake-up as several Ethereum spot exchange-traded fund (

) applications await regulatory approval. These financial instruments promise to bridge the gap between traditional investment markets and the fast-growing world of digital assets, offering investors a regulated and accessible means for gaining exposure to 

This article explores the top pending Ethereum Spot ETF applications, exploring their significance, potential impact on the market and implications for the broader adoption of cryptocurrencies.

What Is an Ethereum Spot ETF Application?

An Ethereum Spot ETF application is a filing submitted to regulatory bodies, such as the U.S. Securities and Exchange Commission (SEC), to list an exchange-traded fund that tracks the price of Ether (ETH), allowing investors to gain exposure to the cryptocurrency without directly holding it.

How Does an Ethereum Spot ETF Application Work?

An Ethereum Spot ETF application is a formal request by a financial institution to gain regulatory approval to offer a financial product that tracks the price of Ether (ETH), the second-largest cryptocurrency and the token of the Ethereum network, in real time. 

Investors can participate in the ETF by purchasing shares through their brokerage accounts. This way, they can gain exposure to Ether's price movements without the complexities associated with directly buying or holding the cryptocurrency. The ETF provider assumes responsibility for securely holding the Ether, managing the fund's day-to-day operations and ensuring ongoing compliance with regulatory requirements.

Current Ethereum Spot ETF Application Landscape

, Fidelity, VanEck and ARK 21Shares have all thrown their hats into the ring by submitting applications to the SEC for approval. These particular issuers have previously applied to run Bitcoin Spot ETFs that are currently approved and trading.

However, the SEC has pushed back on the recent Ethereum Spot ETF applications, prolonging the decision-making process. They've also sought public feedback in order to gauge whether the arguments supporting the approval of Bitcoin Spot ETFs are applicable to Ethereum Spot ETFs as well.

Anticipation has continued to build with the approach of the final deadlines for the SEC's decisions, set for between May 23 and Jul 5, 2024 for various applicants. The SEC's review process involves assessing factors such as the potential for market manipulation and the resemblance between Ethereum spot and futures exchange-traded products.

The outcome of these applications holds significant weight, as it could shape the future landscape of cryptocurrency investment vehicles and play an important role in driving broader adoption of Ethereum within traditional financial markets. Investors and observers alike are closely monitoring these developments, recognizing their potential to influence the trajectory of both Ethereum and the wider crypto market.

Top High-Profile Ethereum Spot ETF Applications

Several high-profile financial institutions have applied for Ethereum Spot ETFs, reflecting a growing interest in cryptocurrency investment products. Following is a list of some notable contenders.

BlackRock, a global investment giant and the world’s largest asset manager, submitted its 

 Ethereum Trust, in November 2023. However, the SEC postponed its decision to late January 2024 and again to March. The SEC is currently seeking public comment on the application, particularly concerning Ethereum’s susceptibility to fraud, and has delayed its decision until Jun 11, 2024.

Franklin Templeton, another major player in the investment world, 

 for an Ethereum Spot ETF in February 2024, making it the latest contender to join several other firms in the race. The SEC has delayed the deadline to June 2024 to rule on the firm’s application. If approved, the fund will be listed on the Chicago Board Options Exchange as Franklin Ethereum ETF.

Known for its ETFs and mutual funds, investment management firm VanEck has expressed doubts about the SEC's approval of its Ethereum Spot ETF application, 

 in July 2021. Although the SEC’s decision is expected in May 2024, VanEck’s CEO has voiced his skepticism of approval by the May 23, 2024 deadline, citing the regulators' ominous silence. Notably, VanEck holds the distinction of being the first investment management firm to file an ETH Spot ETF application in the United States.

21Shares specializes in cryptocurrency exchange-traded products (

), while ARK Invest focuses on thematic investing. The two firms 

 for the ARK 21Shares Ethereum ETF in September 2023, with the SEC expected to decide by May 24, 2024. The application has been 

 to include a cash-creation model, and has proposed plans to stake a portion of the ETF’s Ether for generating additional income.

A global asset manager focused on cryptocurrencies, Hashdex 

 with the SEC in September 2023 to list and trade shares of the 

 its decision on the application, with a verdict expected by late May 2024.

Grayscale is the world’s largest digital currency asset manager, with a range of investment products that provides exposure to cryptocurrencies and the digital currency asset class. The firm 

 its Grayscale Ethereum Trust into an Ether Spot ETF in October 2023. The SEC extended the review period, setting a new deadline for June 2024. 

Invesco, an investment management firm, has partnered with Galaxy Digital, a diversified financial services firm, to create a 

 for an Ethereum Spot ETF to be named the Invesco Galaxy Ethereum ETF. The SEC's decision, expected in December 2023, has been 

Fidelity Investments is a major financial services corporation with a global presence and millions of customers. Fidelity first filed for an Ethereum Spot ETF in November 2023. It later 

 its application in March 2024 to include ETH staking, which would allow investors to earn additional income from staking rewards. The SEC has set a deadline of May 23, 2024 to approve or deny the application.

What Could Happen If an Ethereum Spot ETF Application Is Approved?

The approval of an Ethereum Spot ETF application holds significant implications for the cryptocurrency market.

Approval of an Ethereum Spot ETF could mark a significant milestone for the crypto market. It would greatly improve Ethereum's accessibility, bolster market confidence and potentially drive up Ether’s price. In addition, such an approval would represent a new milestone in cryptocurrency adoption, providing investors with a regulated and easy avenue for investing in Ethereum. Nevertheless, regulatory hurdles and market volatility are variables that could influence the timing and magnitude of the approval of the pending applications.

ethereum spot etf applications featured image

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An Overview of the Top Pending Ethereum Spot ETF Applications

Stripe is reentering the cryptocurrency market by allowing merchants to accept payments in USD Coin (USDC) on Ethereum, Solana, and Polygon networks

The SPX index is down 0.46%, influenced by disappointing economic data indicating a slowdown and persistent inflation, along with poor earnings from companies such as Meta Platforms and IBM. The broader cryptocurrency market is up, with Bitcoin and Ether rising by 1.12% and 1.45%, respectively in the past 24 hours.

Today’s outperformer is W, which jumped 16.1% after Wormhole launches Native Token Transfers for seamless W token interoperability across blockchains.

Wormhole (W), launched in 2020, is a cross-chain protocol that facilitates communication and token transfers across over 30 blockchain networks. Originally a crypto bridge between Solana and Ethereum, it has expanded to include features like the Portal token bridge and messaging protocols, serving as a comprehensive platform for cross-chain interactions. Wormhole has launched Native Token Transfers (NTT) to enable seamless transfers of the W token across blockchains like Solana and Ethereum without needing liquidity pools. This innovation supports Wormhole's introduction of a multichain governance system and W staking, enhancing the token's functionality and security across diverse ecosystems. NTT marks a key step in Wormhole's roadmap, advancing its commitment to interoperability and decentralized, flexible token usage.

Check Out the Latest Prices, Charts, and Data of 

Stripe is reentering the cryptocurrency market by allowing merchants to accept payments in USD Coin (USDC) on Ethereum, Solana, and Polygon networks starting this summer. Originally, Stripe accepted Bitcoin in 2014 but discontinued this option in 2018 due to increasing costs. The new initiative will support USDC transactions that are automatically converted to fiat currency for merchants, aiming to enhance global payment accessibility, particularly for those without traditional banking facilities. This marks Stripe's continued interest in the evolving potential of cryptocurrencies.

Bitcoin's price showed volatility near $64,000, influenced by reduced ETF inflows and a market tug-of-war. U.S. inflows slowed, ending a streak for BlackRock’s iShares Bitcoin Trust. Meanwhile, Morgan Stanley may soon enable direct broker recommendations for Bitcoin ETFs, potentially increasing demand. In contrast to U.S. regulatory hesitations, Hong Kong is launching three spot BTC ETFs. Despite these fluctuations, Fidelity Digital Assets remains optimistic, citing an increase in smaller Bitcoin wallets as a positive indicator of broader adoption.

The Aethir Cloud Drop campaign features an airdrop that is accessible through various activities, including purchasing Aethir Checker nodes, engaging on social media, participating in quizzes, referring friends, and being part of certain NFT/token communities. Eligibility for the airdrop is determined by a badge and quest system. More details are provided on their website and Twitter page.

Beginner

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Stripe Reintroduces Crypto Payments with USDC Support on Multiple Blockchain Networks

Merlin Starter (MSTAR) is an IDO launchpad and accelerator dedicated to supporting Layer 2 projects for Bitcoin native asset applications.

Over the last couple of years, projects aiming to develop the wider Bitcoin (

) crypto ecosystem have been gaining more attention in the crypto industry, taking some focus away from 

-based initiatives. With the arrival of projects such as 

, one might even say that the Bitcoin ecosystem is experiencing a kind of innovative development that characterized Ethereum's heyday between 2015 and 2020.

Among the projects driving this phenomenon are Merlin Chain (MERL) and its integral Merlin Starter (MSTAR). Merlin Chain is a Bitcoin Layer 2 (L2) platform committed to supporting utilization and enhanced liquidity for Bitcoin native assets, while Merlin Starter, a Bitcoin-focused 

 and L2 project accelerator, is a core part of the wider Merlin ecosystem,

 (MSTAR) is an IDO launchpad and Layer 2 accelerator dedicated to supporting promising Bitcoin-focused decentralized projects.

 It's an integral part of the L2 Merlin Chain (MERL), designed to facilitate a seamless flow of Bitcoin native assets across various protocols in the Bitcoin ecosystem. Merlin Starter aims to support projects dedicated to enhancing the circulation and liquidity of Bitcoin native assets, both on Merlin Chain and across a variety of Bitcoin-focused protocols and networks.

Founded in 2023, the Merlin project launched its operations in early 2024, with Merlin Starter's native MSTAR token debuting in mid-April 2024.

Merlin Starter is made up of two main components — an 

 launchpad and a Bitcoin Layer 2 project accelerator. Additionally, the 

 NFT collection is a critical element within the project's ecosystem.

The IDO launchpad on Merlin Starter facilitates the launch of projects dedicated to native asset issuance, enhanced 

 and free asset circulation for the Bitcoin ecosystem. It's the first native launchpad of the Merlin platform. The launchpad also supports new projects that explore cross-chain functionality and focus on enabling Bitcoin native assets across different platforms.

As of late April 2024, the launchpad is still in the early stages of its operation, but already lists a couple of initial projects that it’s helped to launch. The most recent of these is Sparkle (FCFS), a gamified astrology app.

The Merlin Starter launchpad offers a number of different token launch modes, including 

, oversubscription lotteries and allocations based on preset weightings. A variety of token standards are supported, including the highly popular 

 and ERC-20 as well as the less common BRC-420, ERC-404 and Atomicals (ARC-20). Standards supporting cross-chain assets may also be available. 

Merlin Starter’s IDO launchpad also features an insurance protocol that helps protect investors from either 7-day or 14-day loss.

While the Merlin Starter IDO launchpad is dedicated to facilitating the launch of new tokens, its accelerator is an initiative aimed at providing consultancy and support to L2 apps and protocols at the pre-launch stage, as well as in the critical post-launch period.

Via the accelerator, the Merlin Starter team offers multidisciplinary consultancy services in areas such as technical support, marketing strategies and initiatives, human resources and 

Merlin's Spellbook is an NFT collection issued by Merlin Starter. Spellbook NFTs grant holders eligibility for a 20,000,000 MSTAR token airdrop, should they choose to stake the NFT. Staking a Spellbook NFT in exchange for MSTAR locks the NFT, and the NFT is subsequently burned. As an NFT staker, you may also qualify (depending upon random selection) for IDO whitelist entries.

At the center of the wider Merlin ecosystem, Merlin Chain is an L2 platform dedicated to enabling cross-chain applications utilizing Bitcoin native assets. Although it operates as a dedicated Bitcoin L2 network, Merlin Chain also offers 

 (EVM) compatibility in order to better support cross-chain use cases.

 network, which allows it to achieve significant scalability and cost efficiencies. The average block time on the chain is less than one second, while the average transaction fee is measured in tiny fractions of a cent.

Merlin Starter's native crypto, MSTAR, is a recently launched token (April 2024) that’s used for the following functions on the IDO launchpad:

The token's maximum and total supply is 1 billion. Supply allocation shares for MSTAR are shown in the chart below.

You can buy the MSTAR token on Bybit through a Spot pair with USDT (

). Additionally, you can join Bybit's MSTAR campaigns to grab a share of the 

The first campaign, MSTAR Community Airdrop Quest, runs through May 10, 2024, 8AM UTC. It’s offering a total prize pool of 8,900,000 MSTAR, featuring a 7,000,000 MSTAR community airdrop, a 1,000,000 MSTAR referral prize pool and an exclusive affiliate referral event with a 900,000 MSTAR prize pool. The second campaign, Token Splash, is being held through Apr 30, 2024, 9AM UTC, with a 2,800,000 MSTAR prize pool.

As a plethora of projects such as Merlin Starter look to extend Bitcoin's functionality, its blockchain is steadily moving away from a passive state of use that’s reserved for asset transfers and storage. Merlin Starter is contributing a great deal to putting Bitcoin native assets to use in various apps and protocols.

While Merlin Chain is doing the critical job of enabling the actual utilization of assets via its Layer 2 network, Merlin Starter is a pivotal endeavor aimed at supporting numerous new projects looking to make Bitcoin a more active crypto environment. The more of these projects we see, the more likely it is that Bitcoin will develop into a thriving ecosystem that could rival Ethereum’s. To achieve such a goal, Merlin Starter is exactly the catalyst the industry needs.

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Merlin Starter (MSTAR): Empowering Startups and Innovation

Bybit Learn

DeFi

From improving liquidity to expanding upon scalability, DeFi 2.0 is here to stay. Read on to learn how it improves upon DeFi's original shortcomings.

The first wave of decentralized finance, collectively known as DeFi 1.0, gave people a way to invest and exchange cryptocurrency outside of traditional, centralized markets. Now, a new generation of decentralized initiatives is taking shape, and it’s already been dubbed DeFi 2.0. This in-depth guide will answer the question, “What is DeFi 2.0?” It will also explain DeFi 2.0 vs. DeFi 1.0 and describe how to invest in DeFi 2.0, giving you the knowledge you need to capitalize on the latest innovations in 

DeFi 2.0 is a collection of decentralized finance projects that aim to improve on the previous efforts of DeFi 1.0. The movement focuses on making improvements in the areas of liquidity, scalability, governance and security.

Any investigation of this topic needs to start with the question, “What is DeFi 2.0?” From there, the natural follow-up is, “How is DeFi 2.0 different from. DeFi 1.0?”

While the idea of DeFi 2.0 vs. DeFi 1.0”suggests two separate ideas, it’s worth remembering that they spring from the same general theory. Both DeFi 1.0 and DeFi 2.0 are iterations of a single notion: The idea that blockchains allow for a decentralized finance ecosystem which bypasses traditional centers of financial power.

“DeFi” in general refers to a collection of decentralized applications that use smart contracts and secure oracle networks to conduct finance without intermediaries. DeFi 2.0 remains true to this central premise, but makes adjustments to overcome some of DeFi 1.0’s principal shortcomings.

As crypto enthusiasts flocked to DeFi applications, they couldn’t help but notice considerable limitations. For one thing, liquidity was hard to come by. The fact that providing liquidity required users to lock up their funds led to an undesirable amount of financial rigidity and capital inefficiency. DeFi protocols also had notoriously complicated user interfaces, meaning few beyond experienced crypto traders could navigate the applications. The protocols’ reliance on Ethereum caused further complications, as the blockchain’s increasing popularity produced slower transaction times and higher fees.

When considering DeFi 2.0 vs. DeFi 1.0, you need to remember that DeFi 2.0 represents a concerted effort to overcome some of these central difficulties. While the DeFi ecosystem is still far from perfect, a few key improvements are already apparent. Once you understand them, you’ll be ready to learn how to invest in DeFi 2.0.

DeFi 2.0 Creates Stronger Connections Between Users

If you’re thinking about what DeFi 2.0 protocols are — and how they’re different from more traditional financial applications — DeFi 2.0 protocols are essentially decentralized financial applications that endeavor to connect users who contribute liquidity. These applications promote the types of horizontal connections that foster lasting relationships. This, in turn, will produce a DeFi ecosystem that’s decentralized but still interconnected.

DeFi 2.0 Uses Optimized Governance Patterns

Governance is a key issue in any decentralized endeavor, and DeFi 2.0 is based on better administrative solutions. In DeFi 2.0 protocols, community members cooperate to make decisions and create policies. This democratic process allows frameworks to develop without relying on a powerful arbiter.

DeFi 2.0 Includes User-Friendly Incentive Schemes

Decentralized finance can only survive with liquidity, and DeFi 2.0 projects are employing creative incentive programs to acquire and maintain sufficient capital. Not only do incentives help solve the liquidity problems that plagued DeFi 1.0, but they also foster connections between users, thus helping to produce more cooperative communities.

DeFi 2.0 Promises a More Sustainable Ecosystem

If there’s one thing you should understand after asking what DeFi 2.0 is, it’s that the new decentralized protocols are being designed with an eye toward sustainability. This is also the key factor in the “DeFi 2.0 vs. DeFi 1.0” discussion. The combination of liquidity, interconnectedness and sound governance should create a decentralized ecosystem that can last. This sustainability will allow DeFi 2.0 projects to gather further momentum, attract more users, and redefine finance on a larger scale.

You can answer the question, “What is DeFi 2.0?” without knowing how the associated protocols operate. A quick overview of DeFi 2.0 vs. DeFi 1.0 is enough to explain the basic idea behind the latest iteration of decentralized finance, but a more in-depth discussion demonstrates exactly how investors can benefit from DeFi 2.0.

There are several features unique to DeFi 2.0 that make the movement a more appealing target for crypto investors. From smart contract insurance to self-repaying loans, these novel ideas lay the groundwork for a sustainable DeFi ecosystem.

In the DeFi 2.0 vs. DeFi 1.0 discussion, one of the biggest issues is user-friendliness. DeFi 2.0 protocols often allow investors to take out insurance on their smart contracts. This is a significant source of protection, especially for novice investors.

Many people would love to stake LP tokens in a smart contract but worry that the contract could become compromised. They know that a compromised contract is impossible to rectify on the blockchain, and they lack the technical nous to protect their investments on their own. An insurance policy allows them to stake tokens without any concerns. Not only does this help individual investors, but it also encourages the influx of more capital into the protocol.

DeFi 2.0 projects are introducing new measures to mitigate this inherent risk. Some protocols use the proceeds from fees to insure users against impermanent loss. They can also mint new coins to make up for losses. All of these policies make DeFi a safer option for crypto investors.

The DeFi 2.0 ecosystem allows for a remarkable financial maneuver in which loans pay for themselves. A lender can provide a user with a loan in exchange for collateral in the form of a small deposit. This deposit is then invested by the lender, who goes on to earn interest. Once the lender has earned the full price of the initial loan, they return the deposit, and the loan recipient ends up not having to repay the loan.

Most people who ask, “What is DeFi 2.0?” are also curious about any risks that might be associated with investing in the movement. While this second iteration of DeFi is generally safer than its predecessor, there’s still no guarantee that every investment will prove successful. Even the best DeFi 2.0 projects have inherent drawbacks, and investors should be aware of any potential pitfalls before staking tokens. Once you’ve learned about the main risks, you’ll understand more about how to invest in DeFi 2.0.

Crypto investors can’t be completely sure that the smart contracts they’re interacting with won’t be hacked. Before staking tokens, always investigate the project thoroughly. Even after you’ve done your due diligence, a surprising hack could occur. Luckily, insuring your smart contracts can help limit the damage in case of illegal activity.

As decentralized finance attracts users and more people learn how to invest in DeFi 2.0, governments around the world will become increasingly eager to get involved. Many governments will try to impose regulations on DeFi 2.0 protocols. As an investor, it’s important to recognize that your future activities might be affected by rules and limitations that don’t yet exist. While this concern shouldn’t scare you off from participating altogether, it’s certainly something to keep in mind as you discover how to invest in DeFi 2.0.

We’ve answered our initial question, “What is DeFi 2.0?” We’ve also learned about DeFi 2.0 vs. DeFi 1.0. Now, it’s time to learn how to invest in DeFi 2.0. Decentralized finance involves several types of maneuvers that may be unfamiliar to crypto newcomers. Once you’ve learned a bit about common investment strategies, you’ll have a better understanding of the general DeFi 2.0 ecosystem.

If you were at all familiar with decentralized finance before learning what DeFi 2.0 is, you might have questioned how the new movement deals with yield farming. This mechanism, a key innovation of DeFi 1.0, has become even more useful for investors in the latest installment of decentralized finance.

As with older projects, DeFi 2.0 protocols use yield farming to get liquidity from users. However, they go even farther by letting investors use tokens as collateral for loans. This twist on yield farming makes the protocols a more enticing option for investors.

Self-repaying loans represent wonderful opportunities for lenders and loanees alike. Offering loans in exchange for interest payments is a great way to engage in yield farming within a DeFi 2.0 protocol.

Liquidity provision gives crypto holders an easy way to profit from their holdings. With this maneuver, holders pass some of their cryptocurrency to a liquidity pool so that users can trade against it. In exchange, the holder who provides the currency receives a fee. These types of simple, win-win transactions allow DeFi 2.0 protocols to attract liquidity while users earn a profit.

Anyone asking about DeFi 2.0 is likely to be equally curious about DAOs, the autonomous organizations that provide the basis for most decentralized finance. Investors can join a DAO by purchasing the organization’s token. Once you’ve bought yourself into the community, you should have a say in governance. This direct participation represents a motivation for learning about how to invest in DeFi 2.0.

If you want to know how to invest in DeFi 2.0, you need to have a basic understanding of the existing projects. While there are too many protocols to list them all, this guide will introduce you to some of the most important undertakings.

If there was a single project you’d heard of when you first wondered about DeFi 2.0, it was probably Olympus DAO. This decentralized reserve currency protocol set new standards in DeFi and became the starting point for DeFi 2.0. Investors can use the project for all sorts of yield farming, from staking to purchasing bonds. The organization is especially famous for its unique, user-friendly bonding model.

For DeFi beginners trying to understand DeFi 2.0, it’s simply a movement that seeks to improve on DeFi 1.0 by freeing up additional liquidity, fostering more connections between users and creating a sustainable financial ecosystem. In considering DeFi 2.0 vs. DeFi 1.0, remember that the latest iteration of decentralized finance represents a major improvement, but it hasn’t been perfected yet. From here, you can employ your newfound understanding of how to invest in DeFi 2.0.

What Is DeFi 2.0, How It Improves on DeFi 1.0 — and How to Invest in It

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