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Introduction to Web 3.0: The Meaning and Value
With so many obscure terms and abbreviations on the internet, it is difficult to make sense of the trends they represent. This is more so when said trends are supposed to have great value and earn you a lot of money. Web3 is one such popular buzzword on the internet. However, despite its popularity, many people have a small grasp about its meaning and value. Therefore, this article briefly explains the meaning and value of Web3. The article also highlights some of the most fundamental differences between Web3 and Web2 and outlines some of the best use cases and applications of Web3. Lastly, the article sheds light on some of the opposition to Web3.
What is Web 3.0?
Web3 (or Web 3.0) is the theorized evolution of Web2, the current internet framework. It is a framework that includes everything the internet is about, including enabling infrastructures that allow users to access and use the internet. Unlike Web2, the development of Web3 is still ongoing but its proponents are convinced that it would revolutionize the internet as we all know it. However, this makes it difficult to define. So, here are five (5) definite things about Web3.
Web3 is the third generation of internet frameworks
The first generation was Web1 and characterized the earliest period of internet usage until around 2003. This internet framework used a lot of open protocols, especially HTTP, and users could only read the content. The second generation of internet frameworks was Web2. Social media is the main feature of this generation and users are able to create and market products on the internet. Web2 is the current framework.
Web3 is the third generation of the internet. It is driven by a decentralized system with the largest fraction of the internet owned and operated by user communities rather than big tech companies. It is still in the pipelines but is supposed to be superior to Web1 and Web2 in its integration with real life, quality of content, ease of generating and marketing user products and services, and more compatible assimilation with imminent technological innovations. Also, the Web3 framework is powered by the open-source license and does not require third parties to authenticate interactions (so it is trustless) or permit them (permissionless).
Web3 was developed around the idea of decentralized blockchains
Web3 does not support any kind of autocracy. With respect to governance, it mirrors the core characteristic of decentralized blockchain governance. Big tech companies are removed from making administrative decisions. Instead, the governance of the internet is left to DAOs (Decentralized Autonomous Organizations). These are groups and communities bound by fixed rules and regulations coded into and overseen by protocols in a blockchain. As a result, no single entity is all-powerful or irreplaceable, the way we have it with Facebook and Twitter now, for instance.
So, with Web3, everything is distributed, from governance to opportunities. Users have governance tokens and can take up the responsibility of temporary leadership. Similarly, random users have tokens that allow them to ‘plug in’ to investment opportunities without relying on government policies.
Web3 is chiefly designed to protect the interests of creators and users
The first two generations were mostly centralized and ordinary users were either only passive observers or subsidiary beneficiaries. Conversely, Web3 is all about creators and users. The internet in this form does not offer any unseen value to big corporations or governments. Instead, content creators and users are given all the privileges to work and earn.
For instance, Web3 allows creators to earn money by gaining direct access to users without having to pay intermediaries to help them facilitate this link. Also, users earn money by buying direct stakes in creators’ content. Web3 also offers provisions for users to sell their data to whoever needs it. So, Web3 does not run the adverts-based business model which is one of the defining features of Web2, and it has a lot more privacy.
Web3 is the internet of value
On Web3, value is sovereign. The current internet framework is not democratized for value creation. This is why it has been described as the internet of information, much like Web1. But Web3 is all about what is valuable. So, the more value a creator can offer to users, the more valuable the creator is rated on the internet.
Put differently, Web3 promotes innovation. As a result, online communities are built around innovation and value creation rather than corporate sovereignty. It is a framework of meritocracy where Peter Parker can design his Spiderman suit at home and Dr. Otto Gunther Octavius can build his octopus tentacles in his lab.
Web3 is the most useful framework for crypto and a crypto-related future
Web3 is also the framework for the anticipated future of decentralization. This future is written around users and gives them a lot more control and influence over their data and web activities. In the area of social media, for example, users can rely on Web3 to interact with the ‘metaverse’ or the universe of digital things. This way, they will be able to work and earn, as well as amuse themselves with different varieties of dynamic platforms and access tokens.
The Web3 framework will also allow users to gain access to crypto-related features without going through meddlesome middlemen. These include all kinds of trade and investment platforms, cryptocurrency, NFTs (non-fungible tokens), gamification, and all that. So, in the fewest words, Web3 will let people make better use of the offerings of the crypto industry.
Web 2.0 vs Web 3.0
You should be able to already differentiate Web2 and Web3. Although the latter is an upgrade of the former, it is a significant upgrade—enough to be described as a unique innovation. The core difference between these internet frameworks is the file-retrieval system. In the case of Web2, this system is centralized and overseen by organizations that users have to pay in exchange for their databases. For Web3, the database system is decentralized and information processing is spread across many computers with no particular center in terms of supremacy and influence. Every other difference follows from this.
So, due to the decentralized nature of Web3, users and value creators are the biggest beneficiaries. In other words, big tech companies have no particular advantage and do not get to decide for or impose anything on users. Content creators are also able to rely on the value of their products they have direct access to users.
In brief, the main differences between Web2 and Web3 are presented below:
WEB 2:
- Centralized database and file systems
- Biggest beneficiary are Big Tech companies
- Top featured in social media
- AI role is auxiliary and support
- Current status is online
WEB 3:
- Decentralized database and file systems
- Biggest beneficiary are creators and users
- Top featured in Metaverse
- AI role is principal and fundamental
- Current status is Underway
Notable Use Cases and Applications of Web 3.0
Here are 4 of the most notable use cases and applications of Web3 and why it is expected to revolutionize the internet.
- The metaverse: The metaverse is to Web3 what social media is to Web2. It is a massive data-powered digital universe where users can interact as they do in real life. More than that, Web3 proponents hope that the metaverse becomes something of a second life for users, a place for working and earning, investment opportunities, and a great deal of entertainment.
- Immersive web experience: Web3 is expected to perfect the use of radical tech innovations like VR (virtual reality) and AR (augmented reality). These will offer users a greater immersive experience than what we have presently, like the OASIS from science fiction action film Ready Player One.
- AI and ML: AI (artificial intelligence) and ML (machine learning) form the core of Web3’s operating infrastructure. It therefore uses a lot of machine-to-machine communication, information processing, and decision-making. This means that there will be fewer avenues for error.
- No intermediaries: Web3 runs exclusively as a decentralized internet framework. Therefore, it reflects every other major feature of decentralization including DeFi (decentralized finance), DApps (decentralized apps), and so on. So, all intermediary roles are removed.
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Kyrrex Celebrates Five Years of Progress!
On September 3, 2023, Kyrrex celebrated an important milestone: our fifth anniversary. Five years in the dynamic world of cryptocurrency is an achievement that evokes a deep sense of pride. This date holds great importance to us. Over these years, we’ve been deeply committed to our mission, continually iterating and improving for the community.
Throughout this journey, we have strived to develop and introduce features that serve the evolving needs of our users. We have empowered businesses, providing them with the tools they need to launch and operate seamlessly in the crypto space. The introduction of the liquidity hub has ensured that trades are executed with speed and efficiency, creating a reliable trading environment.
Kyrrex's cooperation with the world of sports is a testament to our commitment to excellence. Among our respected ambassadors, we are honored to count elite athletes such as Jorge Martín from MotoGP, Martín Di Nenno, a padel top player, and others. This collaboration is deeply symbolic. These athletes, who stand at the peak of their sports, mirror our relentless passion for perfection.
We also have been part of history, observing meteoric rises in the value of Bitcoin and other cryptocurrencies, navigating through moments of market turbulence, and witnessing the inception and demise of various startups and billion-dollar projects.
As we move forward, our vision for Kyrrex is crystal clear. The roadmap ahead is filled with ambitious plans, from expanding into new markets and acquiring more licenses to introducing more innovative trading projects. Each of these milestones will be realized thanks to the dedication of every team member. Special acknowledgment goes to our CEO, Kevin Plumpton, and the co-founders, Mykhailo Romanenko and Viktor Kochetov, whose leadership and vision guide our journey.
As we turn the page and step into a new chapter of Kyrrex’s story, we begin a fresh countdown, setting our sights on greater horizons.
Here's to the next chapter, to innovation, and to continued success!
3min reads
Unlocking the Importance of Liquidity in Crypto Trading
Have you ever wondered what makes crypto trading tick? It’s all about liquidity! In this blog post, we will delve into the importance of liquidity in crypto trading and how it compares to traditional finance. Get ready to unlock the secrets of this vital aspect of the trading world.
Short Summary
- Liquidity in crypto trading is essential for efficient transactions, price determination, market stability and risk management.
- Factors impacting liquidity include trading volume, the presence of market makers and regulatory environment.
- Crypto trading liquidity has both similar features to traditional finance as well as distinct differences which should be Explored.
Understanding Liquidity in Crypto Trading
As in traditional financial markets, liquidity in crypto trading refers to the ease of buying or selling digital assets without significantly affecting their price. The concept of liquidity is crucial for the smooth operation of any market, be it the stock market or the cryptocurrency market. Factors such as market depth and bid-ask spread influence cryptocurrency liquidity, just as they do in stock markets.
A deep market with ample liquidity indicates a healthy market, allowing efficient trading and accurate price discovery. Conversely, low liquidity can pose challenges, such as increased slippage and price volatility, which can discourage investors and hinder market stability.
Market Depth
Market depth refers to the number of buy and sell orders available at different price levels, with higher depth indicating greater liquidity. Increased market depth is indicative of increased liquidity, as it suggests a higher level of trading activity and a more liquid market.
In other words, the more buy and sell orders that exist on the market, the easier it is for traders to execute their transactions efficiently without causing significant price fluctuations.
Bid-Ask Spread
The bid-ask spread is another crucial indicator of market liquidity in crypto trading. It represents the gap between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept for a given digital asset. A narrower spread is indicative of increased liquidity, as it reflects a higher presence of buyers and sellers in the market.
A tighter spread facilitates faster and more efficient trading of assets at fair prices, ensuring that all market participants can execute their transactions without significant delays or price fluctuations.
Factors Affecting Cryptocurrency Liquidity
Cryptocurrency liquidity is influenced by various factors, including trading volume, market makers, and the regulatory environment. Understanding these factors is essential for traders and investors who wish to make well-informed decisions and navigate the often volatile crypto market with confidence.
Let’s take a closer look at each of these factors and how they impact liquidity in the crypto market.
Trading Volume
Trading volume is the amount of assets traded within a specific period of time, with greater volume indicating a higher level of liquidity. Increased trading volume implies heightened trading activity, which in turn suggests a more liquid market.
Identifying digital assets with high trading volume is one way to spot cryptocurrencies with high liquidity, as a large investor base and high trading activity are indicative of increased liquidity.
Market Makers
Market makers play a vital role in providing liquidity in crypto trading. These entities, which can include large banks, brokers, or hedge funds, place buy and sell orders in the market, thus ensuring sufficient liquidity to facilitate efficient trading and maintain price stability.
Market makers continuously quote bid-ask asset prices to keep the spreads within a certain range, making a profit from the bid-ask spread difference. By providing liquidity, market makers contribute to reduced slippage, improved price discovery, and enhanced market efficiency.
Regulatory Environment
The regulatory environment surrounding crypto trading can also have a significant impact on liquidity. Some ways in which regulations can affect liquidity include:
- The amount of liquidity available in the market
- The types of assets that can be traded
- The cost of trading
- The speed of trade executions
A favorable regulatory environment can encourage participation in the market, thereby increasing liquidity, while stringent regulations can discourage participation and lead to reduced liquidity.
The Role of Liquidity Providers in Crypto Trading
Liquidity providers play a crucial role in the crypto trading ecosystem by ensuring the availability of assets for trading and maintaining stable prices. These entities help to create a more efficient market, allowing traders and investors to execute their transactions without significant delays or price fluctuations.
Let’s explore the different types of liquidity providers and the incentives that encourage them to provide liquidity to the market.
Types of Liquidity Providers
In the crypto trading space, liquidity providers can be:
- Institutional entities, such as large banks, brokers, or hedge funds
- Individual or institutional investors providing capital to liquidity pools with crypto assets
- Centralized exchanges (more traditional and regulated)
- Decentralized exchanges (peer-to-peer and generally unregulated)
An example of a centralized exchange liquidity provider is Kyrrex Liquidity Hub which provides improved and centralized liquidity with seamless transaction matching, and a wide variety of cryptocurrencies to exchanges and other crypto platforms. Its features include effortless crypto asset matching, sufficient order book liquidity, high-speed processing, minimized commission costs, and secure custodial storage for clients' funds. Liquidity through the Hub can be deployed directly or through other modes including market maker.
Automated market makers are computer programs that utilize algorithms to facilitate the matching of buyers and sellers, contributing to the overall liquidity of the market.
Incentives for Providing Liquidity
Liquidity providers can benefit from various incentives in the crypto trading ecosystem. For instance, they can earn transaction fees and token rewards for providing liquidity to trading pairs on exchanges. Additionally, liquidity providers may take advantage of yield farming incentives, which involve providing liquidity to a decentralized exchange or liquidity pool and receiving a share of the pool’s trading fees or rewards in return.
These incentives help to attract and retain liquidity providers, ensuring a stable and efficient market for all participants.
Benefits of High Liquidity in Crypto Trading
High liquidity in crypto trading offers several advantages for traders and investors alike. With ample liquidity, market participants can enjoy reduced slippage, better price discovery, and increased market efficiency, which are essential for smooth and profitable trading.
In the following sections, we will delve into each of these benefits and discuss their implications for the crypto market.
Reduced Slippage
Reduced slippage is one of the key benefits of high liquidity in crypto trading. With more buyers and sellers in the market, large orders can be executed without significantly impacting the asset’s price, leading to more favorable execution prices for traders.
This is particularly important for investors with sizable positions, as it allows them to enter or exit the market with minimal price impact, thereby maximizing their potential returns.
Better Price Discovery
High liquidity also leads to better price discovery, ensuring that assets are traded at fair market value and preventing potential price manipulation. In a highly liquid market, the presence of more buyers and sellers helps to establish an accurate price for each asset based on market activity.
This is essential for a stable and efficient market, as it allows traders and investors to execute their transactions at prices that accurately reflect the true value of the underlying assets.
Increased Market Efficiency
Lastly, high liquidity contributes to increased market efficiency, allowing for:
- Smoother transactions
- A more stable trading environment
- Accelerated transaction times
- More efficient bid-ask spreads
- More efficient pricing
- Reduced slippage
This creates a more favorable trading atmosphere for all market participants.
Challenges of Low Liquidity in Crypto Trading
While high liquidity offers numerous benefits, low liquidity in crypto trading can pose several challenges. These challenges include increased slippage, price volatility, and limited trading opportunities, which can discourage new investors from entering the market and hinder overall market stability.
Let’s take a closer look at each of these challenges and their implications for the crypto trading landscape.
Increased Slippage
Increased slippage is a common challenge in low-liquidity crypto trading environments. As fewer buyers and sellers are available on the market, large orders can have a significant impact on the asset’s price, resulting in unfavorable execution prices for traders.
This can be particularly detrimental for investors with large positions, as it can erode their potential returns and increase their exposure to market risk.
Price Volatility
Low liquidity can also lead to price volatility, as sudden price swings can occur due to low trading volume. Price volatility can be both a blessing and a curse for traders, as it offers potential profit opportunities but also introduces the risk of unpredictable price shifts.
In a low-liquidity market, price volatility can be exacerbated, making it more challenging for traders and investors to navigate the market and execute their transactions with confidence.
Limited Trading Opportunities
Finally, limited trading opportunities can arise from low liquidity in the crypto market. With fewer buyers and sellers available, it can be difficult for traders to find suitable trading opportunities that align with their strategies and risk tolerance.
This can discourage new investors from entering the market and potentially hinder overall market growth and stability.
Comparing Crypto Trading Liquidity to Traditional Finance
Crypto trading liquidity shares both similarities and differences with traditional finance, such as stock and forex markets. While both markets rely on liquidity for smooth transactions, price discovery, and market stability, the decentralized nature of crypto markets, the role of liquidity providers, and the impact of regulatory environments set them apart.
Let’s explore these similarities and differences in more detail.
Similarities
One of the key similarities between crypto trading liquidity and traditional finance is the importance of liquidity for efficient transactions, price determination, and market stability. Both markets, including fiat currencies, operate on the principle of supply and demand, with buyers and sellers interacting to establish the fair market value of assets.
Additionally, both markets experience risks and volatility associated with trading, as well as comparable transaction experiences and user interfaces.
Differences
The main difference between crypto trading liquidity and traditional finance lies in the decentralized nature of crypto markets. Unlike traditional finance, crypto markets operate without a central authority or intermediary, relying on a network of interconnected computers to facilitate trading and secure transactions.
Additionally, the role of liquidity providers in crypto trading differs from their role in traditional finance, with liquidity providers in the crypto space including centralized exchanges, decentralized exchanges, and automated market makers.
Lastly, the regulatory environment surrounding crypto trading can have a significant impact on liquidity, with regulations in various countries affecting the availability of assets for trading, as well as the cost and speed of trade execution.
Summary
In conclusion, liquidity is a vital aspect of the crypto trading ecosystem, with high liquidity offering numerous benefits such as reduced slippage, better price discovery, and increased market efficiency. Understanding the factors affecting cryptocurrency liquidity, as well as the role of liquidity providers and the similarities and differences between crypto trading liquidity and traditional finance, is crucial for traders and investors looking to navigate the ever-evolving world of digital assets. With this knowledge in hand, you’re now better equipped to make well-informed decisions and capitalize on the exciting opportunities that crypto trading has to offer.
Frequently Asked Questions
Is high liquidity good or bad in crypto?
High liquidity in crypto is generally seen as a good sign as it indicates a deep and stable market with low price changes. It also makes it easier to buy and sell digital assets at reasonable prices without having to worry about liquidity issues.
How does liquidity work crypto?
Liquidity in cryptocurrency markets is achieved through the use of order books and market participation. Liquidity pools act as a reserve for digital assets, providing liquidity to speed up transactions for decentralized exchanges (DEX).
Liquidity also refers to the ease with which tokens can be swapped or converted into fiat currencies.
What are the main factors affecting cryptocurrency liquidity?
Cryptocurrency liquidity is heavily influenced by trading volume, the presence of market makers and applicable regulations.
Market makers are entities that provide liquidity to the market by placing buy and sell orders. They are usually large financial institutions or professional traders. Regulations can also affect liquidity, as certain jurisdictions may also affect liquidity.
What are some key differences between crypto trading liquidity and traditional finance?
Crypto trading liquidity is different from traditional finance in that it is decentralized, involves liquidity providers, and is subject to varying regulatory environments.
These differences can have a significant impact on the trading experience, from the types of assets available to the speed of transactions. For example, decentralized exchanges are often faster and more secure than centralized exchanges, but they may not offer the same features as centralized exchanges.
5min reads
Access All the Benefits of Cardano (ADA) on the Kyrrex Platform
Kyrrex keeps pushing boundaries to provide its users with an innovative and comprehensive cryptocurrency trading experience. Recently, we delighted our customers by introducing NEAR and ALGO. Today, we're thrilled to announce another significant addition to our platform – Cardano (ADA).
Diving into the world of Cardano
Cardano is not your average cryptocurrency. Launched in 2017 by Ethereum co-founder Charles Hoskinson, Cardano distinguishes itself from the pack with a unique focus on scientific philosophy and a research-driven approach.
Perhaps one of the most interesting aspects of Cardano is its dual-layer architecture. This structure separates the ledger of account values from the reason why values are moved from one account to the other. This distinction leads to greater security, flexibility, and scalability, making Cardano a promising addition to our platform.
With a market capitalization of approximately $10 billion, Cardano holds a significant position in the cryptocurrency landscape. Of the total supply of 45 billion ADA, around 35 billion are currently in circulation.
Exploring new trading opportunities with Cardano on Kyrrex
As a Kyrrex user, you now have the opportunity to deposit, withdraw, and trade ADA coins directly from your Kyrrex account. Moreover, we're launching the ADA-USDT trading pair, allowing you to effortlessly trade between Cardano and Tether, based on market trends and your personal trading strategy.
To interact with this asset, simply go to your personal Dashboard and select the desired function, such as trading, exchanging, depositing, sending, or storing in the Kyrrex wallet. If you haven't done so already, please register and verify your profile.
Continued growth and success at Kyrrex
While we're excited about adding Cardano, it's just one of many recent developments at Kyrrex. We've successfully undergone another ISO certification, further reinforcing our commitment to security and best business practices. Our ambassadors have recently brought home significant victories at the MotoGP/Moto2 Grand Prix in Germany and Italy. Simultaneously, our ambassadors shone at the World Padel Tour, bringing the Kyrrex brand to the forefront of the sports world.
Looking ahead, we're excited about what the future holds for Kyrrex. We'll continue to expand and refine our platform, incorporating the most innovative and exciting cryptocurrencies and features to provide you with an unparalleled trading experience.
Stay tuned for more updates!
5min reads
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