CWC Newsletter #45 (November 18, 2020)
By Taylor Ryker, Analyst
Crypto Two Chainz: Bridging Liquidity to & Performance of the EOS Ecosystem
Welcome back, Team EOS and EOSIO. Crypto Twitter is in a frenzy over the coming bitcoin bull run with institutional money flowing into the crypto space. Greyscale’s and Microstrategy’s recent acquisition of hundreds of millions of dollars worth of bitcoin indicate the growing appetite by traditional companies.
What does this have to do with EOS? While some investors may want to jump ship to benefit in the rising valuation of bitcoin, the short-history of cryptos have shown us that first comes the bitcoin pump and then capital flows into altcoins like Ethereum and then into EOS.
Bitcoin on Ethereum is a growing space where Bitcoin token holders can experience the boom of DeFi on Ethereum. However, who wants to pay for expensive transaction fees and wait for a period of time for the transaction confirmation? I don’t and with the coming mass adoption, no one will. But Ethereum and Bitcoin is where all the liquidity is at for the moment.
These new holders of Bitcoin and Ethereum will demand fast-second transactions that are feeless to them (read: the dApp will be forced to pay for users’ CPU resources). No one will want to wait for slow dial-up like transactions.
They will be incentivized to seek alternative blockchains that offer the aforementioned expectations but with access and compatibility with their Bitcoin or Ethereum.
The alternative blockchains that are best positioned to reap the influx of capital into crypto will be those that have bridges to Bitcoin and Ethereum.
EOS is that blockchain that is becoming equipped with the necessary tools that dApps are adopting to bridge with Ethereum and Bitcoin. This newsletter will revisit my previous post on the potential collaboration between EOS and Ethereum. Since then, more services, bridges, and tools have been released and dApps are beginning to utilize them.
Migration Tools between Ethereum to EOSIO
Why move to EOS and other EOSIO blockchains? The underlying blockchain technology allows for high-speed performance and scalability that is sorely needed for many decentralized applications on Ethereum.
If you have an Ethereum developer friend or know of Ethereum startups who need more blockchain performance for their dApps, take a look at these services. Here are four of the most recent migration service offerings in the EOS community.
1. Infinite X:
2. Callisto Network:
3. DAPP Network:
4. dfuse:
Bitmonds: A Recent Example of Migration from Ethereum to EOS
Bitmonds, a diamond-like NFT collectible, recently announced their migration from Ethereum to EOS. The Bitmonds team cited inefficiencies of Ethereum, such as miner centralization, expensive fees, slow transactions, and no guarantees of Ethereum 2.0.
The reasons for Bitmonds migrating from Ethereum to EOS?:
EOS is "a network that today is able to manage more transactions every day than the sum of all the other blockchain networks."
"It now seems clear not only to us how EOS.IO network is becoming one of the next breeding grounds for future projects...The situation of Ethereum, if not managed with speed and immediate technical choices, will probably rewrite the future scenario of digital collecting projects, many may not survive, even among the best known."
Read their press release, and see that many more Ethereum developers will come to the realization that in order for their dApps to succeed in terms of performance, they will be keen to take a look at EOS and other EOSIO blockchains.
Bridging Ethereum Liquidity to EOS
Ethereum's most significant strength is its liquidity. There is much capital concentrated in the Ethereum ecosystem where developers have an easier time securing funding for their projects and liquidity for their tokens.
On other other hand, EOS-based dApps and startups are having a difficult time locating enough funding. Although many in the EOS community have clamored for Block.one to provide more funding to these projects, I think that it is more vital to figure out a way to make it easier for crypto investors and token holders to use their non-EOSIO tokens on the EOS public blockchain.
With more liquidity entering into the EOS with the recent circulation of tens of millions of dollars of Tether into the EOS DeFi ecosystem, funding can become more accessible for EOS projects. Below are current projects that are addressing this issue of liquidity.
1. pTokens and Crypto Exchanges
pTokens is helping to solve the liquidity issue in EOS. In a nutshell, pTokens tokenizes Bitcoin and other major cryptos like Ethereum and Litecoin on the EOS public blockchain. It allows for EOS token holders to gain positions within these other non-EOS cryptocurrencies while never leaving the EOS ecosystem.
It also provides the rich opportunity for Bitcoin and Ethereum token holders to easily enter the EOS blockchain space by allowing them to swap their tokens for EOS and EOSIO-based tokens. With faster and cheaper transaction times, DeFi on EOS should become more attractive to these outside token holders--they just need access and pTokens give them that access.
pTokens like pBTC can be traded on decentralized swaps like DolphinSwap, newly released hybrid exchange called eosfinex, and centralized exchanges like Bitfinex.
2. Yup.io via LiquidApps
Yup, a social media dApp where you earn Yup tokens for reviews of websites, is a great example of an EOS-based dApp that is harnessing the cross-chain tools of LiquidApps to gain exposure to Ethereum's liquidity markets. In the demo below, LiquidApps shows how the Yup token is traded on Ethereum's Uniswap and the Yup dApp is hosted on EOS.
In short, two chains--Ethereum and EOS--complementing each other. Liquidity of Ethereum and performance of EOS will power the multichain Web 3.0.
Here is the YouTube clip if the Twitter video does not load:
3. Bancor Liquidity Mining
Bancor, a token-swap similar to Uniswap, just recently released their new liquidity mining structure. A token-swap between Ethereum and EOS, Bancor is a pioneer in cross-chain interoperability and liquidity. With Bancor v.2 and liquidity mining, another bridge between EOS and Ethereum will be at developers', users', and investors' disposal.
Other EOSIO Blockchains, Bridges, and Liquidity
Even though EOS and EOS-based services have been the main highlight, I would like to take this time to showcase that other EOSIO blockchains are also committed in leveraging the liquidity of Bitcoin and Ethereum to provide needed capital and liquidity in their dApp environment.
1. Telos + pTokens
Telos, an EOSIO blockchain known for its effective governance, recently announced their deployment of a token swap and now have pBTC coming to blockchain.
2. Equilibrium + Polkadot bridge
In their updated whitepaper, the team behind Equilibrium, who developed the stablecoin EOSDT, announced earlier in the year that they would be leveraging Polkadot blockchain technology to extend cross-chain interoperability for EOS.
"Equilibrium will initially focus on bridging ETH and EOS into Polkadot, and will build DeFi infrastructure around pegged tokens coming from these two chains...Ethereum and EOS are, to date, the two biggest smart contract enabled blockchains, both by market cap and number of daily user metrics. Equilibrium's cross-chain communications protocol will operate on both of these networks, and interoperability between them will be achieved via Polkadot's Substrate technology."
3. WAX + Ethereum liquidity
WAX, an EOSIO sisterchain focused on NFTs and digital collectibles, announced their new tokenomic model. The model incorporates a cross-chain bridge between WAX and Ethereum to leverage the liquidity of Ethereum to enhance the NFT experience on WAX.
"Simply put, we are injecting the economic value created on WAX into the Ethereum DeFi ecosystem. More precisely, we are taking what WAX does best--creating, selling and trading NFTs--and linking the value generated from that activity to Ethereum. This approach combines two blockchains--each the best at what it does--to create the foremost NFT collectible market experience."
Conclusion: Two Chainz for Liquidity & Performance on EOS
These bridges will not stop with Ethereum but will expand to other multichain ecosystems. EOS has the tech, the performance, and the dApps; EOS just needs capital, funding, and liquidity.
Keep up the excitement, the momentum, and the appetite for growth and development. We can achieve much with a determined and supportive community!
See you all next week for another round of the CoolWave Capital Newsletter.
Go EOS! Go EOSIO!
For More EOS and EOSIO coverage: EOS Nation's Hot Sauce, EOSWriter's EOSIO Week in Review, Crypto Peter's Moran Post, and EOS Go's What Happened This Week on EOSIO.
Disclaimer: Taylor Ryker is not a financial advisor and holds the digital tokens or cryptocurrencies represented in the content above. This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this post constitutes a solicitation, recommendation, endorsement, or offer by myself to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. The opinions expressed in this publication are those of the author. They do not purport to reflect the opinions or views of any of the author’s employers.