Crypto-Upvotes experts told about the threat of massive asset outflow from the largest cryptocurrency exchange Binance and its opaque financial statements.

Binance is trying to reassure investors of its financial strength after the collapse of rival exchange FTX. The effects are still being felt in crypto markets. Billions of dollars worth of cryptocurrency were withdrawn from the exchange in a matter of days.

Outflows from Binance could range from $6 billion to $8 billion, including Bitcoin and other cryptocurrencies such as Tron.
At the same time, analyst firm Nansen reported that users of the trading floor withdrew $3.6 billion in Ethereum. And ERC-20 standard tokens in seven days, while $2 billion was withdrawn in just one day.

After the collapse of FTX and subsequent series of bankruptcies of leading crypto players, major crypto exchanges are trying to convince their customers. That they have enough assets in their wallets and user funds are safe and remain available for withdrawal. Earlier this month, accounting firm Mazars produced “proof of reserves” reports for Binance and other exchanges, including Crypto.com and KuCoin.

At the end of an already difficult week for Binance. Mazars said the firm had suspended activities related to audits of companies in the cryptocurrency industry. This is due to concerns about how such reports are perceived by the public. According to Financial Times sources, media hype was one of the factors that influenced the decision of Mazars.

Published reports on crypto exchanges’ reserves are severely limited in data compared to the results of traditional corporate account auditing procedures. Mazars uses what are known as “consistent procedures” to report on reserve validation. But it does not use asset analysis in the usual sense. No assurances or conclusions are given on the figures in the report in this kind of verification.

Reasons for auditing companies to refuse to work with cryptocurrency exchanges

Mazars’ decision to stop working with Binance. And also for others exchanges was not prompted by specific financial problems at any of the exchanges. The firm’s work was severely limited, and the auditors did not delve too deeply into examining the financial situation of the cryptocurrency platforms.

From a risk perspective, what’s happening with Binance could cause secondary problems. A significant outflow of capital from any business can create local liquidity problems. Even if an exchange is able to cover 100% of deposits, it does not mean that it has sufficient funds or liquid investments.

“The ironic thing about what is happening is that the main trigger in a series of bankruptcies in the cryptocurrency market was the rumors that the head of Binance. Also spread in the public space and his verbal manipulation. And now the main problem for his exchange is the emergence of the same type of rumors around Binance.” – said our expert.

“Black Box” new name for Binance

December 19, Reuters released a story that calls Binance a “black box,” referring to the corporate documents and declarations of the exchange, copies of which journalists were able to access. Among the claims against Binance are the concealment of financial data and the share of its native token (BNB) in the balance sheet. The article also mentions security risks in margin trading. And another portion of doubts about the real volume of user funds reserves.

It has become customary for Binance and its head Changpeng Zhao to publicly refute loud statements by journalists as in official publications of this exchange. And in personal social networks in front of millions of followers. Zhao has repeatedly assured that the Mazars report is “further confirmation” that the exchange’s assets equal or exceed its liabilities to customers.

In the case of Binance, we can talk about an excellent marketing strategy. Which provided a stable inflow of new clients for several years ahead. Therefore, potential liquidity problems may be smoothed out or may not even have started.

Assets on wallets with public addresses of Binance amount to more than $60 billion. This information can be checked through any blockchain browser or on special pages of services that track reserves of cryptocurrencies. At the same time, the company does not disclose information about its liabilities. This makes it difficult to determine its actual financial position.

How stable is crypto exchange Binance?

If the outflow of client funds continues, Binance may have a serious need to plug the holes and credit. And who will give it after the collapse of FTX? That’s the biggest question.

If Binance collapses, it will postpone the recovery of the crypto market for many years. And any positive developments in the next two years could lose any positive impact on the Bitcoin exchange rate.

Theoretically, if we consider the collapse of Binance in FTX scenario. It would cause infrastructural problems for the entire cryptocurrency market. On the one hand, the market would survive and exist regardless of the ability of specific projects to sustain their work. On the other hand, the “huge in its scale project decline” associates the crypto market with Binance.

However, in reality, such an apocalyptic scenario has a rather small chance of realization, our expert believes. Therefore, one should not seriously talk about an urgent withdrawal of funds from Binance.

Rather, the more people do not give in to the trend of cryptocurrency withdrawal, the higher will be the safety of each of participants. For each individual isolated investor, it is more profitable to withdraw money outside of exchange. But at the same time, if the majority will continue to keep cryptocurrency inside the project, it will keep Binance stable and will be beneficial to all, says our expert.

Crypto-Upvotes experts conducted their analysis and told about prospects of NFT segment

Throughout 2022, application solutions with NFT have been actively developed in a variety of projects. The audience of the technology continues to grow at a tremendous rate due to the introduction of the technology by social media. This year, some tools related to NFT were implemented by Twitter (audience of about 400 million users), Reddit (audience of about 430 million users), Onlyfans (audience of about 175 million users).Meta (Facebook and Instagram) and Youtube also announced their plans to implement NFT.

Based on these data, we can consider a long-term investment portfolio, taking into account the prospects for the development of NFT

We would suggest dividing the investment portfolio into two parts. The first would be a liquid backbone, the tokens of projects that provide infrastructure for NFT. Polygon blockchain turned out to be the most popular for application solutions. Therefore, as the audience grows, the entire ecosystem could get developed, so the demand for native blockchain tokens would grow accordingly.

Other top blockchains – Ethereum and Binance Smart Chain – may also get a comparable effect from the development of NFT.

Another interesting application of NFT is the Fragment platform from Telegram. It is likely that in the future the supply will expand and the demand for TON will increase.

We suggest forming the second part of the portfolio from specific tokens of various promising NFT tokens. In a growing market, which by all projections should occur in the second half of 2023 and all of 2024. Therefore, collections with high social capital could go up in price several times over.

When to buy ?

Today, terrific conditions for opening long-term positions for at least 1-2 years, better from 3 years or more. The ongoing scandals around centralized exchanges are constantly weighing on the value of the Binance exchange’s native token. And rumors around the potential centralization of Ethereum due to the move to PoS, with validators predominantly in the same jurisdiction, are also negatively affecting the price of ETH in the medium term.

The market as a whole continues to be in a global bearish trend, which opens up the possibility of buying any tokens at undervalued prices.

What is the right investment portfolio structure ?

• Polygon (MATIC) — 20%
• Toncoin (TON) — 20%
• Ethereum (ETH) — 10%
• Binance coin (BNB) — 5%

Another 5% can be allocated under ApeCoin (APE) acting as a native token in the company’s developed meta-universe. The company that owns the world’s most popular NFT-collections Bored Ape Yacht Club, CryptoPunks and Meebits.

The remaining 40% can be distributed among different NFT-collections.

For example, find interesting offers among applied projects from social media, like collections from Reddit or Twitter.

Risks

The first part of the investment portfolio is quite conservative by the standards of the crypto market. It lists well-established, reliable projects that have many growth and development factors other than the NFT segment. Therefore, the risks in 3/5 of the portfolio do not exceed the overall risks of the market.

However, the rest are extremely risky investments. You have to consider that NFTs have several orders of magnitude less liquidity. And predicting the value of NFTs in the future does not differ in its essence from flipping a coin for luck. But, with all that, the investment can pay off many times over, given a lucky set of circumstances. For example, one appreciated token can potentially outweigh the value of all the others that will fall. But there is absolutely no guarantee that this will happen to you, to your chosen collection, with tokens owned by you.

That’s why it’s worth investing only as much as you’re willing to lose at least half of that amount.

Disclaimer

Crypto-Upvotes experts do not give investment advice, this material is published for introductory purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.

Decentralized transactions allow buyers and sellers to set their own terms for cryptocurrency transactions. Main benefits and disadvantages of P2P

Peer-to-peer (P2P) trading is direct trade of users with each other without an exchange as an agent. When working on a traditional crypto exchange, platform organizes transaction on behalf of client. And market price determines the exact price of asset at moment of transaction. P2P trading implies a transaction directly between users on terms they choose.

However, such transactions carry certain risks due to lack of a third party. Large platforms provide some protection for the parties to transactions by offering escrow accounts, feedback systems and user ratings. When making P2P transactions outside of a crypto platform, risks of coming across scammers increase a lot.

How P2P works

A P2P platform is a meeting place for buyers and sellers. Allowing them to conclude a deal on favorable terms for both parties. A user publishes an ad on a platform, specifying specific terms for buying or selling cryptocurrency. These are terms such as price, payment methods and limits.

Second party browses listings and, after selecting optimal conditions, places an order to conduct a transaction with a specific seller. Platforms offer a variety of filters for searching. You can select merchants by their location, payment methods, rating, and even view only those who are fully verified. Most platforms offer information on specific sellers: how many orders they executed, customer reviews, and trade volumes.

Exchange is a guarantor of transaction transparency and honesty. Also platform resolves disputes between its participants. Many exchanges offer escrow for transaction time. Escrow accounts are used: assets are held on them until a buyer makes a payment.

Verification is not always required to work on P2P platforms. Some services do not require personal information. And somewhere they only ask for a phone number or e-mail address. But there are also platforms that require full KYC verification and Google Authenticator. Sometimes services ask for additional information to increase trading limits. But mostly they allow trading cryptocurrencies without disclosing a lot of personal information.

Also, to attract new users, cryptoplatforms offer referral programs. Client receives a percentage of exchange commission from each transaction of their invited users. Opportunities for market participants to buy cryptocurrency on P2P exchanges are constantly expanding.

Benefits of P2P

• When trading on P2P exchanges, many more payment methods are available compared to traditional platforms. Payment methods include bank transfers, cash, using e-wallets, PayPal, gift cards, SWIFT transfers, Western Union and others.
• P2P platforms in most cases allow traders to connect to a service and conduct transactions with zero fees. Not all P2P exchanges offer such service. That’s why it’s a strong point to review terms and conditions of your chosen marketplace. Some exchanges impose a small commission for placing an ad or % of transaction amount.
• Transaction protection with an escrow service blocks funds until parties comply with transaction terms. If either party fails to do so, cryptocurrency or fiat funds are returned.
• You don’t have to have a bank account to buy cryptocurrency on a P2P exchange. Most platforms require only Internet access and a phone.

Disadvantages of P2P

• Although P2P transactions are fast enough, one party may delay the transaction for a variety of reasons. Also, buyer or seller may change his or her mind and cancel transaction while processing transaction. A normal transaction can take anywhere from 10 min to several days (depending on chosen payment method).
• Liquidity on P2P platforms is lower than on CEX exchanges. Therefore, traders making large transactions usually prefer to work on a standard exchange or over-the-counter trading. When platforms provide options to buy and sell cryptocurrency from an administrator or broker (OTC).

Our Crypto-Upvotes experts warn that as with many other cryptocurrency transactions. When you trade on P2P-platform there is a high risk of entering into a deal with a scammer. To prevent meeting with a scammer, you should choose a solid platform for transactions and carefully read statistics of partners. Or choose large CEX exchanges for P2P trading: Binance, OKX, etc.

Blockchain entertainment is not only fun, but also profitable. What options does play-to-earn open, and what are the prospects for the development of industry GameFi ?

GameFi are blockchain projects that allow profits for gaming experience: users earn profits for participating in game. All player items and rights become their property: characters, land, artifacts, clothing, and more.

Project developers choose the cryptocurrency for payments within the project. However, more often than not, each platform creates its own token. Some projects may require a small investment to start gaming activity, but mostly you just have to play.

There are other options for earning money at GameFi. NFT items can be sold. The price of game items will be higher the more popular a game is. You can also rent your virtual property. Or participate in tournaments or bet on the results of competitions. In some projects, you can put your earned coins in stacking.

Basic earning rules and how GameFi works

The main principle of earning in this industry is Play-to-Earn. Players are paid for what they play, which is either hours spent in the app or specific useful in-game actions. All schemes come down to a developer paying users to use their app. In this case, for the use of a project game. Depending on mechanics of these games, there may be slightly different ways of investing in such projects.

Our Crypto-Upvotes experts gave Axie Infinity as an example. In which to “multiply NFT characters” players need to spend in-game currency SLP. If player numbers continue to increase, it might be enough to buy such a token, in the hope that increased demand will drive up prices.

More critical investors can take part in gameplay. Then their earnings will come from the sale of game currency and newly obtained “characters”. There are many such games, but their principles are similar.

A recent trend on STEPN showed that projects actually create very different ‘something-to-Earn’ mechanics: run, jump, play, breathe and even have sex. But each project is unique in some way, and you have to study its history and perspective individually.

In some projects it is enough to buy control tokens. And somewhere the game will involve the investor in internal processes. For ordinary players everything is simple – they exchange their time for the developers’ money. One only needs to assess the risks if entering the game requires an initial investment to buy a starter set of tokens.

GameFi principles are not new, although the association of projects with blockchain has renewed interest in a whole industry. All principles of generating some profit existed before decentralization of games. In most cases, if a player gets something for free. Then money in this transaction is a player himself – his time, personal data, behavioral information, his attention, etc. All of this can be sold to analysts, advertisers, researchers, etc.

How to choose gaming projects to make a profit

First of all, it is better to pay attention to the major established projects with a large audience. For example: Axie Infinity, Alien Worlds,  CryptoBlades and many others. The tokens of these projects have the greatest liquidity, which will reduce risks from investing in them.

Another strategy could be to buy blockchain service tokens. In which most of the GameFi-projects are located. In addition to Ethereum and Binance Smart Chain, it is possible to buy more specific ones: WAX, EOS, KardiaChain, ThunderCore.

Our experts say that it is very dangerous to follow new projects without personal experience. Many of them are created for purposes of scams or financial pyramid scheme principles. Others may close due to bad business processes and external manipulation.

Our Crypto-Upvotes experts named promising projects where there is a strong gamer community with high involvement. This allows brands to integrate into gaming. Coins from game studios and native tokens from the top five most popular games are also worth considering.

Crypto projects often hold Airdrop promotions to give away their own tokens. What to pay attention to when choosing a project in which you want to participate.

Free token distribution or AirDrop – is one of options to get initial capital in cryptocurrency. But it can hardly be considered a stable way to earn money. In fact, no one guarantees that received free tokens will bring profit.

Most of free coins from new Airdrop projects can only be profitable in the short term. Free coins from famous projects can be used in a long term perspective. However, experience with Airdrop can be a source of insight into how cryptocurrency markets work.

What is AirDrop

AirDrop is a promotion for giving away coins for free after completing necessary conditions. A crypto project holds AirDrop cryptocurrencies to raise awareness and attract new potential investors. Most Airdrop launches are new startups or large companies that promote their new products.

Cryptocurrency is credited directly to users’ wallets if they meet certain conditions. Conditions can be different, such as registration, subscription, recruiting friends, and other simple tasks.

Why crypto projects hold Airdrop

Basically, AirDrop is conducted as a marketing campaign to attract attention to the project. Cryptoprojects use giveaways as a way to increase the number of holders.

Another option for AirDrop is to give away control tokens. In addition to their monetary value, these coins give their owners a say in decisions regarding the project. The project community makes decisions by voting. And the number of votes is proportional to the number of shares each token holder has.

How not to fall victim to scammers

A distinctive feature of AirDrop is that the distribution of coins is free. If the developers of a project make participation a condition of any financial investment. Then such an offer can be a scam. Participating in a giveaway may only require a financial investment if it is a DeFi project. Which work on such a blockchain, where you have to pay a commission to a network for transactions itself.

Scammers may ask you to pay a fee to “unlock” free coins you receive. Or make them buy a small number of these tokens first. In order to get more of them in next Airdrop giveaway.

Sometimes the user is asked for credentials to log in to a scam site when registering for a program. Or cryptocurrency keys or other personal data. Having received such information, scammers immediately use it to steal funds. Using this scheme, scammers use many different excuses to obtain confidential information.

Another variant of scam is requests to download “special” software. Or providing links that, when clicked, install malware. Most often such messages come after registering on fake sites of famous projects announcing AirDrop.

Scammers also use coins with names similar to famous tokens. In such cases, user receives a large number of coins to their wallet. In fact, it turns out that in order to get these coins you need to go to a scam site and connect your wallet. But you can’t do that because as soon as you connect your wallet you lose all your money.

If a crypto project offers you a very large amount of money for doing simple tasks. Then you should also be suspicious about such a project. In any case, having decided to participate in AirDrop. You need to carefully check all information about crypto project and conditions of participation in giveaway.

Where to find information about actual AirDrop

A lot of information and advertising channels in messengers and social networks publish announcements about free token giveaways. However, it is not always possible to trust such sources of information.

The best way to learn about AirDrop may be to visit the official websites of famous cryptoprojects. Or their verified social media accounts. Our Crypto-Upvotes experts recommend you to be careful and always study projects before deciding to participate in Airdrop.

Even experienced investors sometimes find it hard to know which of the many young crypto projects is worth investing in. Our experts explain what kind of returns startup coins can bring. What is IDO and where their liquidity collections take place.

Raising capital for companies from a wide range of investors is a critical mechanism for creting new businesses in today’s economy. Crypto assets market is no exception and has its own formats similar to IPO model.

Almost everyone who has encountered cryptocurrencies knows what an ICO is and what happened to this market in 2018. In fact, ICO market is dead after the 2018 bubble, subsequently SEC severely restricted them. Statistics say that about 90% of all ICO ended up failing.

But having gone through a crypto winter, crypto market did not get rid of the natural need for liquidity inflows to nascent projects, which is where the new era of IDO and launchpad started.

To participate in IDO of a project, you will need, as in case of IPO, to get an allocation to buy tokens at a low price before their release on exchange. This is where the main investor profit is hidden. Launchpad already has quite a few – more than 70 platforms. As of today, almost $1 billion has been raised through them. And the average increase in investment was X25. It looks very good for investors, but there are big risks hidden here as well.

Analysis of IDO profits on several major launchpads

We decided to check some of major launchpads (Polkastarter and DAO Maker). And analyze their data based on Cryptorank data. Despite popularity of these platforms, we can immediately notice that each of them individually does not raise hundreds of millions of dollars. On average by platform, each project raises about $261,000. The average profitability on 2 platforms was 5%. In fact, this is the yield since the listing of project. In this material, we provide figures as of early June. When bitcoin was trading above $30,000 and cryptocurrency market was not at bottom as it is today.

Our Crypto-Upvotes experts decided to take a detailed study of one of most popular launch pads – Polkastarter.

The largest number of projects that raised funds on Polkastarter belong to the DeFi category. A total of 38 DeFi projects were placed on the platform. Of these, only 21% did not fall below listing price at end of day. Also of note are the indicators related to token price at historical highs (ATH). Indeed, if you held any new token placed on Polkastarter DeFi for an average of 21 days. You could hope for yields as high as 4,900%. But given the “survival rate” of projects, that would be a veritable casino with no chance of a fundamental prediction.

Most optimal IDO segment on Polkastarter turned out to be the projects serving the blockchain infrastructure. They showed lower returns on almost all metrics. However, with a more limited sample of 11 projects, 27% of projects traded above listing price as of early June, which is the best result across all segments of this platform.

Conclusion

It’s been 4 years since ICO bubble burst, 2 of which turned out to be very “depressing” for the crypto industry. On average, on the 2 largest launchpads, 73% of all projects today are trading below listing price. Thus, participating in project offerings on launchpads for long-term investors seems like a bad idea. Launchpads can be seen as part of a risky portfolio and sell project tokens for a very short period of time after they go to exchange. You should also be extremely careful when buying new project tokens. Once a project has been launched, you have little time to make a decision to sell. You run risks ending up with a token belonging to the same 73% of projects that are now selling below launch price.

Solana released a Web 3.0 phone named “Saga” to appeal to a growing number of mobile phone users accessing digital assets.

Solana Labs has unveiled the “Saga” smartphone based on the Android operating system. “Saga” is a customized version of OSOM smartphone with built-in cryptocurrency wallet features. It will come pre-installed with Solana Mobile Stack. SMS a toolkit that allows you to create decentralized applications for mobile phones.

And so we found out that this smartphone will allow you to store digital assets and NFTs, sign transactions, and pay for purchases through Solana Pay. But it won’t just be a mobile phone. This device will support Solana-based apps and will have its own dapp Store. Solana Labs has said it intends to develop Saga ecosystem with partners like NFT marketplace Magic Eden, DeFi-platform Orca and wallet Phantom.

Also according to Solana website, this device features a 6.67-inch OLED display, 12GB of RAM and 512GB of storage space. The smartphone is based on Qualcomm Snapdragon 8+ Gen 1 chipset.

Also SMS toolkit supports the Seed Vault secure storage protocol for private keys. This latter puts them in a special enclave, separated from the wallet, applications and operating system. Solana Labs explained that SMS provides developers with a set of libraries and APIs that allow them to create decentralized mobile applications for Android devices. Solana Mobile Stack is already available for download on GitHub.

Want to buy this smartphone now? It is possible and our Crypto-Upvotes team found out how to do it.

“Saga” is expected to go on sale in early 2023 at a price of $1,000. Our experts found out that it is already possible to place a pre-order for 100 USDC – this amount will be deducted from the full price of smartphone, it is also already known will first be released in USA, Canada, EU and UK markets. So with an estimated price of $1,000. Saga mobile phone will compete with flagship models from Apple, Samsung and other mobile phone companies. With a strong ecosystem of software developers who can develop alternative Web 3.0 applications.