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Layer 1 levelling up: Cardano builds, partners and expands

Now that smart contracts have launched on Cardano (ADA), what’s been happening with the “layer 1” crypto? Plenty. At least, … Read More
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Now that smart contracts have launched on Cardano (ADA), what’s been happening with the “layer 1” crypto? Plenty. At least, plenty behind the scenes of its current stagnant price action.

With a huge and loyal community of HODLers validating its network, Cardano is a beast of a blockchain. And this is reflected in its overall market cap, which stands at a bit over US$67 billion, just recently pipped by Tether (USDT) at the time of writing.

This makes the project the highest valued proof-of-stake blockchain in existence, seeing as Ethereum (ETH) is still in the process of transitioning from its current proof-of-work consensus to becoming a full-on staking chain. And that’s something which may not happen till early next year at this stage.

But Cardano, in the meantime, has become one of the most decentralised cryptos around – certainly among the big-cap smart-contract platforms – with 71.91 per cent of its current total supply staked by holders, earning them around five to eight per cent APY, on average, on their ADA.

A passionate and growing community, strong fundamentals, a building ecosystem and a reputation for some of the most rigorously tested, scientifically peer-reviewed technology in the business… It all makes Cardano increasingly attractive to big investors looking for solid bets a short drop down the market cap list from Bitcoin and Ethereum.

Here’s just some of what’s been happening with Cardano in recent months and weeks, some of which was discussed at length at the Cardano Summit 2021, held a few weeks ago in late September.

 

A Cardano ecosystem migration – 100 Ethereum projects?

The Alonzo hard fork, completed in early September, released the project’s loooonnnng-awaited smart-contract capability into the wild – and thus, the ability to build dApps (decentralised applications) on top of the layer 1 blockchain.

Cardano is now swiftly seeing its ecosystem grow and build out into some of crypto’s brightest sub-sectors, including DeFi, oracles, gaming, NFTs and more.

It’s still a long way from making a significant dent in the network-effect advantage that Ethereum possesses, but in expansion terms, it’s beginning to rival other building layer 1 ecosystems, such as Solana, Polkadot and Avalanche.

Cardano founder Charles Hoskinson, who also happens to be a cofounder of Ethereum. (Source: YouTube)

In March, Cardano founder Charles Hoskinson told Bloomberg that it’s his goal to “run countries on this blockchain”. The man thinks big.

And, while Hoskinson said he doesn’t care about the likes of “Uniswap, CryptoKitties and other things”, he did say back then that at least 100 companies currently on Ethereum were “in the pipeline” to transition over to Cardano’s blockchain.

Cardano has in-built porting functionality designed to allow Ethereum-built smart-contract applications to transition over with relative ease.

 

Into Africa: Cardano’s Ethiopian partnership

And speaking of running countries on Cardano, Hoskinson and his team at IOHK (Input Output Hong Kong), as well as the project’s commercially focused arm, Emurgo, have a strong focus on building crypto and blockchain-technology adoption across the African continent.

Cardano is unequivocally one of the leading blockchains at the forefront of an African crypto-tech push.

In one of crypto’s most underrated but significant partnerships, IOHK and the Ethopian government announced earlier this year they are working together to track the performance of school students in the country.

The partnership involves five million secondary school students and 750,000 teachers, all using Cardano’s Atala PRISM decentralised identity solution to create tamper-proof student records and help identify areas of educational under-achievement.

It’s a big deal for blockchain adoption – but perhaps more likely a longer game in terms of price-moving action for ADA holders.

There is good potential for consequential transactional volume to be driven into the network on the back of this in the long run, however, and it’s just one of several partnerships IOHK and Cardano has brewing on the African continent.

 

In-built scalability: ‘Hail Hydra!’

While the likes of Arbitrum and Optimism are independently built “layer 2” scaling solutions that are designed to help optimise the Ethereum network as it continues to grow and expand, Cardano has its own scaling solution baked into its protocol as part of the blockchain’s overall design.

It’s called Hydra, and it’s natively built to deal with any issues that arise from attempting to run a seamless high-throughput blockchain network.

As a recent IOHK blog post explains, Hydra is designed to help strike the balance required between maintaining low network transactional fees to satisfy users, and keeping them at a level that “deters potential Denial-of-Service (DoS) attacks”. The solution is also designed to ensure the network avoids storage-based issues as transactional history logs grow over time.

A multi-headed blockchain scalability solution metaphor, yesterday.

Hydra works via a concept known as “isomorphic state channels”, which are “off-chain ledger siblings” that IOHK calls “Heads”, connected both to each other and to the main chain.

If that’s all getting a bit technical, no worries. Just know that Cardano has an in-built solution to help its blockchain scale as it grows, and it’s named after a multi-headed mythological beast. Cool.

Think of the body of the hydra beast as Cardano’s main chain. Then think of all the heads being able to offer 1000 transactions per second of throughput. And think of each Hydra head representing a validator/staking pool on the network. If Cardano has, for example, 1000 of these heads, in theory, its blockchain will be able to scale up to handling one million transactions per second. And that… is fast.

Presuming Hydra, which is still being tested at the time of writing, is released without a hitch, it could be a potentially groundbreaking development in the world of blockchain. You can read more about it here.

 

Cardano stablecoins

Stablecoins are a key component of decentralised finance – so no surprises that some have now sprung up within the Cardano ecosystem.

Djed (pronounced “jed”) is one such enterprise, which self describes on its website as “a crypto-backed algorithmic stablecoin that acts as an autonomous bank developed by IOG [Input Output Global] and issued by COTI.”

COTI, by the way, is a decentralised payments platform that has partnered with Cardano this year to act as a payment rail for the ADA Pay application.

Algorithmic stablecoins use smart contracts to maintain price stability and work effectively and smoothly within DeFi transactions, and these are ultimately the core aims of Djed.

You can read more about it here, and learn why IOHK calls it the “first stablecoin to use formal verification to eliminate price volatility”.

There’s also another interesting stablecoin project designed for Cardano that’s just been announced by the DeFi liquidity protocol MELD.

Interesting, because this one’s backed by gold, stored securely in a vault, and then tokenised and fractionalised.

It relies on gold’s generally stable value, and is enabled as part of a three-way partnership with Tingo Holdings, Nigeria’s largest mobile network, and Ubuntu Tribe, an ethical crypto company that tokenises natural resources.

 

More major partnerships: Dish, Chainlink, Rival gaming

Some other pretty significant partnership bombshells were dropped at the Cardano Summit 2021. Here are three of them…

• The Ethereum rival has cut a deal with major US TV and wireless service provider Dish Network to integrate the Cardano blockchain into the widespread telecom business. Cardano will also apparently be providing its digital identity services to Dish Network consumers.

• Cardano has also partnered with esports and gaming platform Rival to develop “agnostic NFT marketplaces, fan rewards, and more for Rival and its partners”, according to a recent press release.

• Chainlink and Cardano, together at last. The layer 1’s developer IOHK has now teamed up with crypto’s leading “oracle” to help Cardano developers build smart contracts for secure DeFi applications.

The Cardano ecosystem, by the way, does have at least one other oracle solution that we know of, called Charli3 (C3), sitting all the way down at number 924 on the CoinGecko list, with a market-cap valuation of just US$17.5 million at the time of writing.

You’ll find it somewhere on the following overview. It’s a screenshot of a clickable version maintained by the Pool Germany ADA stake pool, which can be viewed in all its interactive glory here.

And, for a more focused look at the Cardano NFT landscape, this next chart comes courtesy of Cardano Daily. This will most likely be subject to change pretty swiftly, as nonfungible token projects are being created and minted thick and fast on every available blockchain, and Cardano is no exception.

 

 

 

The post Layer 1 levelling up: Cardano builds, partners and expands appeared first on Stockhead.

Economics

5 Canadian metal stocks to buy

Highlights Over 43 per cent of the global mining firms are listed on the Toronto Stock Exchange and Toronto Stock Venture Exchange A stock mentioned…

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Highlights

  • Over 43 per cent of the global mining firms are listed on the Toronto Stock Exchange and Toronto Stock Venture Exchange.
  • A stock mentioned here surged by 104.8 per cent in the past year.
  • One of the companies listed earned a gross profit of US$380.2 million in Q2 2021, an increase of US$238.1 million year-over-year.

The Canadian headline index surged by 201 points or 0.97 per cent before closing at C$ 20,819. 94 on Thursday, October 14. Base metals, information technology, and the industrials sectors traded in the green.

Over 43 per cent of the global mining firms are listed on the Toronto Stock Exchange and Toronto Stock Venture Exchange. Here’s a compilation of five TSX-listed metal stocks to consider.

Also read: Top 5 TSX value stocks to buy

  1. Teck Resources Ltd (TSX: TECK)

Teck Resources is engaged in the development and mining of mineral properties. Its business units are focused on zinc, copper, coal, and energy.

Its gross profit increased to C$ 233 million in Q2 from the steelmaking coal business segment.

The company posted an adjusted EBITDA of C$989 million in the second quarter of fiscal 2021, up by 104 per cent year-over-year. Its liquidity as of July 26, 2021, stands at C$6.1 billion.

The stock trading C$ 39.10 apiece holds a P/E ratio of 106.10 as of October 15. The stock’s one-year growth stands at 104.8 per cent and nearly 56.3 per cent YTD.

  1. First Quantum Minerals Ltd (TSX:FM)

The stock worth C$ 27.68 apiece grew by nearly 125 per cent in the past year and 21.13 per cent year-to-date. First Quantum Minerals produces gold, zinc, nickel, copper, and cobalt.

It has mining operations in Australia, Africa, and Latin America.

Also read: Top 3 Canadian smallcap stocks to buy this fall

Its cash flows from operating activities of US$679 million in Q2 2021 were US$524 million higher than Q2 2020.

First Quantum stocks hold a P/E ratio of 46.70, as per TMX data.

The mining firm had US$1.79 billion in net unrestricted cash and cash equivalents at the end of the quarter.

  1. Labrador Iron Ore Royalty Corporation (TSX:LIF)

In the second quarter of fiscal 2021, the investment company posted a royalty revenue of C$ 78.8 million, compared to C$ 46.2 million a year ago.

Its equity earnings from Iron Ore Company of Canada were C$66.2 million in Q2 2021, compared to C$28.7 million YoY.

The steel firm’s stocks surged by nearly 40 per cent in the past year, with a P/E ratio of 7.10.

The company pays a quarterly dividend of C$ 2.10 per stock, with a three-year dividend growth of 39.51.

Also read: This TSX oil & gas stock skyrocketed 285% in a year!

  1. Lundin Mining Corporation (TSX: LUN)

The mining firm’s stocks traded C$10.28 at close on October 14. The diversified base metals producer has operations in Chile, the US, Sweden, Portugal, and Brazil.

Lundin Mining’s gross profit for Q2 2021 was US$380.2 million, an increase of US$238.1 million year-over-year.

The Canadian mining leader had cash and a net cash balance of nearly US$250 million and US$ 190 million as of July 28, respectively. The firm has a return on equity (RoE) of 15.07 per cent and its current dividend yield of 3.5 per cent.

The stocks surged by over 34 per cent in the past year and over 12.8 per cent quarter-to-date.

  1. Turquoise Hill Resources Ltd (TSX:TRQ)

The firm through its principal asset, the Oyu Tolgoi copper-gold mine, is engaged in the exploration, development, and mining operations.

The international mining company posted US$ 317.8 million in revenue from the operating segment for the three months period ended June 30.  The stocks delivered an ROE of 4.63 per cent and a return on assets of 3.25 per cent on October 15.

The scrips have added nearly 80.37 per cent of growth in the past year. It closed at C$19.12 on October 14.

Also read: The Best Cryptocurrencies of 2021

Bottom line

With inflation looming, gold and base metals prices could hold steady or grow. However likely this is, it’s not a given.

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Stocks, Bonds, Crypto, & Copper Soar As Confidence Crashes Near Decade-Lows

Stocks, Bonds, Crypto, & Copper Soar As Confidence Crashes Near Decade-Lows

This week was a tale of two halves. Stonks chopped lower into…

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Stocks, Bonds, Crypto, & Copper Soar As Confidence Crashes Near Decade-Lows

This week was a tale of two halves. Stonks chopped lower into Wednesday morning, bounced off an opening dump then accelerated (despite The Fed Minutes signaled considerably more hawkish taper and rate-trajectory expectations). Nasdaq was the week's biggest gainer (thanks to Small Caps puke today) and The Dow underperformed but only modestly...

That was the S&P's best week since July.

Major reversal in Small Caps today however from the cash open, as the rest of the majors rallied divergently...

This week's panic-buying has reduced the drawdown from record highs (for the S&P) to just 1.5%...

Source: Bloomberg

After Monday's dump, every day this week has opened with a panicky short-squeeze to ignite momentum...

Source: Bloomberg

But as today's OpEx struck early, the short-squeezers ran out of ammo...

Source: Bloomberg

Both Defensives and Cyclicals were bid this week but the latter outperformed today to win the week...

Source: Bloomberg

Sectors were all higher on the week but Utes lagged and Materials led the gains. Financials were towards the lower end of the overall performance...

Source: Bloomberg

In bank-land, earnings have sparked a notable divergence with MS leading and JPM lagging (after a buying panic renewed in WFC today)...

Source: Bloomberg

VIX was clubbed like a baby seal this week, hitting a 15 handle briefly today...Tough to see much downside for vol from here (especially given the typical post-opex bounce)

Bonds were very mixed this week with the short-end dumped and long-end well bid (2Y +8bps, 30Y -12bps)...

Source: Bloomberg

2Y yields pushed up to their highest since March 2020 and 5Y at its highest since Feb 2020...

Source: Bloomberg

The yield curve flattened dramatically this week (the biggest curve flattening week since June) with the 5s30s spread at its lowest since May 2020 as traders signaled expectations for a Fed policy error...

Source: Bloomberg

The very-short-end of the curve repriced dramatically this week - in a hawkish manner - with a full rate-hike now priced in for September 2022 (with expectations that The Fed's taper will start in Dec and end in July 2022)...

Source: Bloomberg

And on a side note, the 'kink' is back and building in the T-Bill curve as the odds of a clean debt-ceiling extension in December slide...

The dollar fell for the 3rd straight day today and suffered the broke a 5-week winning streak.  The dollar has traded in a tight range for the last 3 weeks though...

Source: Bloomberg

Crypto soared higher, rising for 3rd straight week, led by Bitcoin...

Source: Bloomberg

With Bitcoin back above $60k for the first time since April (and in fact reached almost $62k today)...

Source: Bloomberg

Commodities all made gains this week (CRB all comms hit an all-time record high) but copper was the dramatic outperformed while gold lagged...

Source: Bloomberg

WTI rallied for an 8th straight week, its longest winning streak since May 2015, topping $82 for the first time since Oct 2014...

Source: Bloomberg

Copper soared this week (its best week since Nov 2016 and 2nd best week since Oct 2011), back near the May highs, as global inventories plunge...

Source: Bloomberg

Gold tagged $1800 but was unable to hold it...

Finally, you have to laugh really that stocks are surging back towards record highs on a day when consumer sentiment printed at its 2nd lowest level in a decade...

Source: Bloomberg

"Probably nothing..."

 

Still this chart makes us wonder if a redux is in the cards?

Source: Bloomberg

Tyler Durden Fri, 10/15/2021 - 16:00

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Precious Metals

Bitcoin Nears $63k As Dorsey Signals Square Considering Mining System

Bitcoin Nears $63k As Dorsey Signals Square Considering Mining System

Update (1635ET): Square (and Twitter) CEO Jack Dorsey has been a long-time…

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Bitcoin Nears $63k As Dorsey Signals Square Considering Mining System

Update (1635ET): Square (and Twitter) CEO Jack Dorsey has been a long-time advocate for cryptocurrencies and this evening he tweeted about his latest plans to create a Bitcoin mining system:

As he detailed in a brief thread:

1/ Mining needs to be more distributed. The core job of a miner is to securely settle transactions without the need for trusted 3rd parties. This is critical well after the last bitcoin is mined. The more decentralized this is, the more resilient the Bitcoin network becomes. True? 

2/ Mining needs to be more efficient. Driving towards clean and efficient energy use is great for Bitcoin’s economics, impact, and scalability. Energy is a system-level problem that requires innovation in silicon, software, and integration. What are the largest opportunities here? 

3/ Silicon design is too concentrated into a few companies. This means supply is likely overly constrained. Silicon development is very expensive, requires long term investment, and is best coupled tightly with software and system design. Why aren’t more companies doing this work? 

4/ There isn’t enough focus on vertical integration. Considering hardware, software, productization, and distribution requires accountability for delivering to an end customer vs improving a single technology in the chain. Does seeing this as a single system improve accessibility? 

5/ Mining isn’t accessible to everyone. Bitcoin mining should be as easy as plugging a rig into a power source. There isn’t enough incentive today for individuals to overcome the complexity of running a miner for themselves. What are the biggest barriers for people running miners? 

Our team led by @JesseDorogusker will start the deep technical investigation required to take on this project. We’d love your thoughts, ideas, concerns, and collaboration. Should we do this? Why or why not? We’ll update this thread as we make our decisions. And now over to Jesse. 

That headline was enough to push Bitcoin even higher on the day, nearing $63k at its peak...

*  *  *

Cryptos are all rallying this morning but Bitcoin is making headlines as it broke back above the $60,000 level for the first since April...

Source: Bloomberg

This has extended a recent run from around $40,000 which has been driven by increasingly optimistic signs of a Bitcoin ETF being imminent...

Source: Bloomberg

This has pushed Bitcoin back up to be the world's 8th largest asset (just below that of Silver), and well above $1 trillion market cap...

Source

Citing “people familiar with the matter,” Bloomberg has reported that the United States Securities and Exchange Commission is poised to approve the first Bitcoin futures ETFs in the country.

The anonymous sources said:

“The regulator isn’t likely to block the products from starting to trade next week.”

Bloomberg's Eric Balchunas recently laid out his odds for which of the numerous ETF proposals will be accepted first...

And for those in the "digital gold" camp, this analog from the '70s is interesting. CoinTelegraph reports that Austrian investor and analyst Niko Jilch this week referenced famed investor Paul Tudor Jones while explaining the “excitement” over the Bitcoin ETF.

Tudor Jones had previously highlighted Bitcoin’s cycles being similar to gold in the 1970s — just when it had become a futures product itself and enjoyed a 10-year bull run followed by a 50% correction.

Gold’s 1970s rip, TechDev additionally noted, fits extremely neatly over Bitcoin’s performance since October 2020.

Finally, not to be forgotten, Ethereum is holding above $3800...

Tyler Durden Fri, 10/15/2021 - 16:42
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