Crypto Combatting Global Income Inequality
Let’s face it, we live in a society that is not always fair, and the distribution of wealth is one of the areas where we experience it most profoundly.
By 2022, nearly 70 percent of U.S. wealth will belong to 10 percent of Americans. The remaining 90% will be left with 30% of the wealth. A similar situation is occurring in South Africa, where 10 percent of the population owns 65 percent of the wealth.
Not only that, but many people do not even have access to general banking services. Although some high-level financial services are limited to accredited investors.
But things are going to change, thanks to cryptocurrencies. It gives people:
1. Easier access to affordable remittance methods
Cross-border payments with traditional banks, for example, can be a problem because of the cost and time involved. Remittances account for between 20 percent and 38.5 percent of GDP in countries such as El Salvador, Haiti, and Tonga. On the other hand, stable coins like USDC can be much cheaper, costing $3 to $5 to send on Ether and less than $0.01 on the BNB smartchain and the Tron and Cardano blockchains.
This could make a huge difference for people in developing countries like Venezuela, where the average monthly salary is $25.
2. Banking the underbank
Although there are several payment service providers that accept foreign payments for freelancers, they usually have to link their bank accounts in order to withdraw money. With 2.5 billion people worldwide without a bank account, this can be a problem. Instead, blockchain makes this process possible without a bank, requiring only a cryptographic wallet.
This gives people in low-income countries the ability to exchange goods and services.
3. Easy access to financial tools
To access traditional financial instruments such as stocks and bonds, users must provide documents such as proof of income and bank statements. This creates a barrier to market entry for many people.
Cryptocurrencies, with the help of DeFi, allow users to use this financial instrument without any threshold. It allows users to participate in betting, share buying and selling, and lending platforms using only their wallet.
4. Immune to inflation
Over the years, inflation has led to a significant drop in the value of various national currencies, including the U.S. dollar. Several countries are experiencing hyperinflation, the result of poor monetary management by the country’s central bank, which has led to a sharp drop in the value of their currencies.
In Turkey, inflation has reached 60 percent. For Venezuela it is about 200 percent and has adopted cryptocurrencies to deal with it.
Countries like Turkey are struggling recently with 60 percent inflation. Worse, Venezuela is struggling with 200% inflation, which is why it has adopted cryptocurrencies. Bitcoin, for example, is deflationary in nature and could be a good alternative to Venezuela’s national currency.
These are just some of the ways in which cryptocurrencies are trying to level the playing field.
Who Holds 50% of Axie Infinity’s SLP Token Supply?
A suspected Axie Infinity wallet has silently collected billions of SLP (Smooth Love Potion) chips. It is the cryptocurrency of the game Axie Infinity. The game is similar to Pokémon, where players buy NFTs from the creatures they raise and play against other players.
SLPs are earned by completing daily quests and battles. It can be used to generate Aces, create runes and spells (upgrades) in the game and can be sold in the bazaar.
On Wednesday, this anonymous wallet had just over 22 billion SLP, or nearly 50 percent of the total amount in circulation. To put these numbers in context, an average Axie Infinity player generates between 10 and 70 SLP per day, depending on his or her skill level.
But who is behind this wallet?
Benko initially speculated that the wallet was “an Axie Infinity system that automatically pays SLPs to winning players.”
However, co-founder Sky Mavis and COO Aleksander Larson later clarified that neither Sky Mavis nor Axie Infinity holds cryptocurrencies in the game. Everything is created by the players.
Probably not: Yield Guild Games co-founder Gabby Dizon stated that YGG does not own the wallet and hinted that it might be a wallet used by an exchange to store liquidity.
In response, Benko added that although many SLP transactions see Binance as a sender or receiver, he does not see it as a wallet owned by a cryptocurrency exchange in terms of transactions.
Aave Safeguarding Its Users
The Aave community is planning to close ETH loans until the “merger” is completed.
In less than a week, Ether will begin the long-awaited upgrade and transition to Proof of Stake (PoS). While this is a positive for the Ethereum network, as it will reduce transaction costs and increase speed, it could be a setback for miners who previously mined under Proof of Work (PoW), as anyone can now become a verifier by pledging 32 ETH. As a result, some miners may attempt a hard fork and continue mining under PoW.
What does Aave have to do with this?
Many people may try to borrow ETH from Aave and participate in “mergers” to take advantage of the price increase following a hard fork. Large-scale borrowing could cause liquidity problems and volatility in the prices of Ether and allocated ETH.
To avoid this, Aave is asking the community to approve a proposal to suspend ETH.
Is Polygon an Outlier?
Ominous concerns about rising interest rates have colored the cryptocurrency market red recently, but Polygon does not seem to mind.
The number of transactions on Polygon’s network has increased by 13 percent and NFT tokens by 10 percent, while weekly active users have reached about 800,000. This is all due to the reduction in transaction fees following the recent ZkEVM upgrade.
In addition, Polygon founder Sandeep Nailwal’s “Symbolic Capital” recently raised $50 million for a new startup fund aimed at web3.0 companies and focused on “innovative web3 applications.”
Looks like all the rainbows and sunbeams are from Polygon!
- Candy brand, Mars, to soon launch an NFT inspired candy.
- Snoop Dogg and Eminem to perform Bored Apes track at MTV’s video music awards.
- Cardano’s Vasil hard fork is approaching soon. Expected to go live in september.
- Compound protocol has been hit by a bug leading to a temporary freeze on Compound Ether trades.
That’s all for now; we will be back soon with more updates. Until then, why not check out the Mudrex app; it is very good.