This week DeFiRev.com caught up with Nischal Shetty, the talented CEO of WazirX, India’s largest cryptocurrency exchange.
What a year! Congrats on all of your success thus far Nischal and to the whole WazirX Team! Tell us about how this year has been for you through your eyes.
This year has been pretty great. We kicked off the year with WRX IEO and listing on Binance Launchpad. The crypto banking ban was struck down by the Supreme Court of India, and it was a huge win for the ecosystem. We also launched Blockchain for India fund with Binance to support Indian entrepreneurs trying to build in this space. Looking back, our team has done quite a lot of work within these 6 months. Coronavirus has been a bummer though, and I hope we get out of this pandemic soon.
How did you first get into bitcoin & cryptocurrencies?
I’ve been a believer in blockchain for many years, but it was in 2017 that I went down the blockchain rabbit hole. It’s when centralised social networks like Twitter and Instagram started cutting off API access, that I got serious about Crypto. I realised that you cannot depend on centralised companies because they can change the rules of the game anytime they want. The global decentralised ecosystem is very nascent right now but I’m determined to contribute towards its growth so that someday decentralisation becomes a way of life on the internet.
In 2017, I also tried using Indian cryptocurrency exchanges, and was disappointed with the UX and lack of transparency. Having built Crowdfire, a social media management product with 20 Million users, we understood what it takes to build and scale a global tech product out of India. We love challenges, and decided to build WazirX – a cryptocurrency exchange which offers people world-class UX, transparency & trust. WazirX is available on the Web, Android, iOS in India and around the world.
What sort of growth do you expect for WazirX this year?
Ever since the Supreme Court verdict, we’re seeing a steady growth in our user signups. Moreover, the nationwide lockdown has given people more time in hand to read more about crypto which leads them to WazirX to buy crypto for the first time. We are also seeing a monthly average growth of 66% in our monthly trading volume. So overall, I’m optimistic about our growth.
China largely fueled the first bullrun for bitcoin in 2013, and in 2017, Japan and South Korea did the same. I think India is next. What do you think?
Absolutely! With a population of 1 Billion, the Indian market is a sleeping giant. There are more than 5 Million crypto users in India. Positive regulation will further boost crypto adoption in India.
You were very wise to develop WazirX as a principally mobile-focused app, that was great foresight. The WazirX App is great by the way. What other trends do you forecast?
India being predominantly mobile heavy as a country, it was important to get the mobile apps to be lightweight and simple to use. We’re glad that WazirX mobile app is the highest rated crypto exchange app in the country today.
While it’s hard to predict trends, I see the need to make crypto products as simple as possible in order to gain the attention of mass audiences.
DeFi is growing fast and I believe it’ll attract millions of users in the next couple of years.
Please share with our viewers, who may not know, the latest updates in terms of crypto regulation in India. What’s your take?
Currently, the Internet and Mobile Association of India (IAMAI) is working on a code of conduct for cryptocurrency companies in India. We have a draft version ready and are working on updating the guidelines in line with the technology changes that have happened in the last few years. The code of conduct lays out a guideline for KYC/AML and other regulatory-related features. We look forward to helping our government formulate the right crypto regulations for the country.
Do you think digital assets can help to bridge the gap between the huge disparity of wealth distribution in India?
Definitely! For the new younger generation, digital assets are the opportunity to be early participants. If you look at traditional assets such as Real Estate, Gold etc., we’re too late to the party there. But digital assets are new, unknown, difficult to understand. As an early mover, you can have an edge here. Decentralised aspect of digital assets is yet another positive point that ensures everyone gets equal opportunity to participate in this innovation.
What has been your favorite moment in crypto history thus far?
It has to be the Supreme Court’s crypto verdict. It was a long fight of 2 years. The verdict was over 100 pages long, and it was amazing to see that our judge bench had done a thorough research on the subject. It also implies that as a country, India is pro-innovation.
When you’re not working, what do you like to do for fun? What are your favorite hobbies?
I like to read and learn new stuff. I like to travel, however, the pandemic has put a temporary stop to that. I’ve been brushing up on my software coding skills during the lockdown.
What are a few of your favorite books? What are some that have made a long-lasting impact on you? (Can be fiction or nonfiction)
The Godfather was one of those books that I read during my college days which made me think about work, ethics and code of conduct as a businessman.
More recently, it was good to read Sapiens to gain perspective about the progress we’ve made as a species. The Anarchy by William Dalrymple is yet another book I enjoyed reading and learning from.
What has it been like working so closely with Changpeng Zhao, another instrumental and widely revered figure in the space, and Binance?
It’s been amazing! CZ has a ton of experience and it shows in the way he makes decisions (fast). I’ve been picking up a lot of learnings from the way he’s set up Binance team and the way teams within Binance function.
I’m applying those learnings to WazirX product and team. We’ve grown 10X in under 6 months of getting acquired by Binance. The learnings and support we’ve gotten from CZ, Wei (Binance CFO) and team has been very helpful in helping WazirX achieve this explosive growth.
Is there anything you would like to share, unveil, or tease in terms of new features or releases for our viewers regarding WazirX this year?
We’re working on some amazing things, and will unveil to our users very soon!
DeFi has taken the world by storm this year. What excites you the most about DeFi?
DeFi allows anyone, anywhere in the world to participate and build financial products. It has been the dark horse of crypto. Having grown over 600% in 2019, I’m confident that DeFi is poised to grow even faster this year. For India to be able to participate in DeFi, we need positive crypto regulations. It will help hundreds & thousands of Indian devs to build their own DeFi apps. It is the future and I’m planning to learn as much as I can.
Nischal, thanks so much for taking the time to do this interview! You are truly a pioneer and so many in the world now look up to you as a true leader and role model.
On behalf of DeFiRev.com and all of us in the sector, we wanted to say thank you for advancing the space.
On the WazirX website it says under your name that “He’s on a mission to involve everyone in the blockchain revolution!” We love that!
We’re on a mission to involve everyone in the DeFi Revolution! And it’s coming…
-The DeFi Rev Team
DeFiRev.com is #1 in DeFi News. Check back in soon to find out the latest in DeFi News.
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Saffron Finance: SFI a new DeFi bluechip? This hidden crypto gem seems primed for massive growth.
November 10, 2020
Saffron Finance or SFI, is currently one of the hottest defi projects right now that is still very much under the radar.
Just as we have reported on YFI, CORE, and Curve long before most DeFi news organizations, this is one we’re definitely adding to our watchlist.
Just like the aforementioned tokens, SFI seems to be in the same league of technical expertise mixed with an extremely creative application, all with code that is completely original. Here’s what you need to know about Saffron Finance.
What is Saffron Finance?
Saffron. Finance is bent towards innovative offerings in the crypto world. It is a protocol meant for the tokenization of on-chain assets. There is an advantage of the format of the tokenization of on-chain assets as it allows the liquidity providers great flexibility and unhindered access to the base collateral leveraging the benefits of staking.
Typically due to the overcrowding of different scenarios, Liquidity providers have to undergo insurmountable impermanent losses as a result of extreme volatility.
Yet, Saffron is one such protocol that narrows down such outcomes and provides liquidity providers with the necessary dynamic exposure.
Customize your risk
Liquidity providers can now select and customize their risk and return profile with the use of Saffron Pool Tranches. Pools are segregated into different tranches each having their own set of properties. The different tranches here are:
AA Tranche: In this case, the LPs add liquidity to the AA tranche earn less interest but are protected and covered in case of loss from platform risk. The covered capital comes from the principal and interest earnings of A tranche LPs. They have a great share in the SFI token generation grabbing 80% from it all.
A Tranche: Under this category, LPs add liquidity to the A tranche and earn far better interest compared to the previous, yet vulnerable enough to lose their interest in case they are exposed to platform risks. The liquidity providers under this tranche earn 10% of the SFI tokens generated per epoch. Their earnings will not be included in covering the first loss of AA tranches.
S Tranche: The S tranche like the A tranche earns 10% of SFI generated per epoch. The S epoch has an underhand mechanism to maintain the exact value of the tranche interest multiplier. It maintains the position of equilibrium between A and AA tranches with its functionality.
Saffron individually tokenizes the future earning stream and the NPV of the used-up capital in every tranche. The earnings-based on tokenized holdings are distributed across all tranches through payback waterfalls.
The Epochs are discussed in tranches are of 14-days in length. In the epoch period, the liquidity providers can earn interest on the platforms and mine SFI tokens – the native token of Saffron Finance.
When liquidity gets locked in the pool, they can trade their Saffron LP tokens defining their ownership of the pool. But when the 14-day epoch period ends, the Liquidity providers can remove their liquidity with SFI mined and interest earned. The first epoch was already kicked off on 1 Nov and all the liquidity was added to the S tranche. The other two tranches will be available in the second epoch.
Saffron has been launched with DAI liquidity mining. With this, all DAI will be added to the Saffron pool and is used for compounding and earning interest. The best part about it all is that in the future versions of the protocol additional currencies and platforms will be added dynamically.
SFI is generated at the end of the epoch and is redeemable in proportion to the total outstanding dsec tokens generated during that epoch. They are redeemable in proportion to the total outstanding dsec tokens generated in that epoch.
Saffron smart contracts have already been deployed and their code has been verified on etherscan and already been added to a GitHub repository. The team is still working on code audits but the team’s ongoing development timeline has allowed for it and the entire set of Saffron smart contracts. The Saffron Pool, adapter, strategy, and token contracts have been tested with 10,000 DAI in the best test epoch on the Ethereum mainnet.
SFI Pools and Adapters
The platform has pools of liquidity that collect deposited base assets from LPs and deploy them on platforms in order to earn interest. Adapters connect this pooled capital to platforms.
The already launched first adapter is DAI/Compound adapter which connects the DAI pool to the Compound platform giving the DAI pool LPs the chance to pool together and earn interest on Compound. This strategy connects all pools and adapters together, selects the best adapter for capital deployment. It also generates and distributes SFI tokens to LPs at the end of every epoch.
By offering asset collateralization on its platform, liquidity providers have access to dynamic exposure and have a great advantage of selecting customized risk and return profiles.
Saffron Finance Telegram: https://t.me/saffronfinance
Saffron Medium: medium.com/saffron-finance
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Ethereum 2.0 Launch: Staking, Launch Date, and More. Here’s everything you need to know.
Ethereum 2.0 – what it is and why is it necessary?
Ethereum 2.0 is a major upgrade to the Ethereum Network that aims to improve the speed, efficiency, and scalability of the network. Ethereum is up for a major facelift with the new version release which will state to drastically improve its transaction volumes, alleviate congestion, and high gas costs. Upon reaching the final phase of the upgrade, dubbed as ‘Phase 2’ Ethereum will meet the goals of being a 100% transparent and open network for decentralized finance.
Ethereum 2.0 will involve sharding to drastically augment the bandwidth and reduce gas cost making it cheaper to send Ethereum, tokens, and interact with smart contracts. The system will undergo fundamental economic changes also allowing support to stake nodes and earn Ethereum as passive income. Ethereum 2.0 is a unified effort of thousands of developers who have put in years of hard work.
The Ethereum 2.0 upgrade will be done in 3 distinct phases starting with Phase 0. After having faced criticism for the network’s high transaction costs and fragility during peak usage will Ethereum 2.0 stand up for the challenge? This we will come to know once the launch is successfully built and practiced.
The next generation of Ethereum Blockchain will go live on December 1’st and will go from a Proof-Of-Work model to a Proof-Of-Stake model where participants can tie their crypto to the network as collateral. As per the announcement, for the launch to really happen, 16384 validators will have to stake a minimum of 32 Ether worth $12,800 at current market rates thereby underpinning the network. Once the threshold has been staked it will trigger the launch of Beacon Chain in the Ethereum 2.0 genesis event.
What’s different about this time?
The most important change is that the consensus mechanism will transition from PoW to PoS which is touted to be more effective and energy-efficient in terms of network maintenance. Both PoW and PoS are designed to incentivize network maintenance ensuring that the blockchain data is tamper-proof. Hence in a PoW system, one unit of computational power equals one unit of mining power, and in PoS one unit of value secures one unit of mining power for the validator.
In Proof of Stake validators stake crypto for the right to verify the transaction. The validators are selected to propose a block based on the amount of crypto they hold and the duration of how long they have held it. The main advantage of PoS is that it is far more energy-efficient than PoW as it disengages energy-intensive computer processing from the consensus algorithm. This also means that there is a lot of computing power to secure the blockchain.
The other big change is the introduction of network sharding which will happen at a later phase. Sharding implies that only a portion of the nodes has to validate any given transaction instead of all of them. This will directly increase the network’s throughput in a big way.
The full roll-out of Ethereum 2.0 will take place in three phases: Phase 0, 1, and 2. Phase 0 as we know is aiming for a December 2020 launch date with other phases coming in the following years. Phase 0 is looking at the implementation of the Beacon chain that stores and manages the registry of validators and deploying the PoS consensus mechanism for Ethereum 2.0.
The original PoW chain will concurrently run alongside so that there is no break in data continuity. Phase 1 is due in 2021 and will see the integration of Proof Of Stake shard chains.
Ethereum 2.0 will be arguably much better than its earlier version
One of the reasons calling for the upgrade has been scalability. Ethereum 1.0 can only support 30 TPS causing delays and congestions. Ethereum 2.0 promises up to 100,000 transactions per second through the implementation of shard chains. The new version has also been designed with security in mind. Most of the Proof of Stake networks have a small set of validators making it a more centralized system with poor network security.
Furthermore, Ethereum 2.0 requires a minimum of 16,384 validators making it ultra-secure. The Ethereum Foundation is also setting up a dedicated security team for Ethereum 2.0 which will research all the possible cybersecurity issues that plague the cryptocurrency sector. One of the top researchers for Ethereum 2.0, Justin Drake said that the research will also include “fuzzing, bounty hunting, pager duty, crypto-economic modeling, applied cryptanalysis, formal verification”.
The co-founder of Ethereum Vitalik shared a roadmap of how the next few years things will pan out for Ethereum in the below-given tweet.
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Harvest Finance Hack Explained. Here’s how it happened.
Unscrambling the Harvest Finance hack and its aftermath
Harvest Finance, the Decentralized finance protocol was hacked for a staggering $24 million. The attack was a reminder to the crypto community that DeFi has sure risen to prominence but it has its own share of loopholes, and it is this that the attackers take advantage of.
Harvest Finance attack details
The attacker directly attacks the protocol’s liquidity pools leading the arbitrage attack using a large flash loan – a type of uncollateralized loan. The attacker later returned $2.5 million but in a mere seven-minute act, the entire hack was complete, leaving the protocol stakeholders bewildered.
In further addition to the details of the hack, the protocol revealed that the hacker manipulated prices on one money lego which is the Curve Y pool. This was done to drain another money lego farm USDT (fUSDT), farm USDC(fUSDC) multiple times.
The attacker then converted the funds to renBTC and later excited to Bitcoin. renBTC is not synthetic because it does not rely on any liquidation mechanism and it is certainly not the price of Bitcoin on Ethereum. It is a one-to-one representation of Bitcoin on Ethereum which can be redeemed for BTC at any time and in any amount.
The native token of Harvest Finance, FARM fell 54% to $101.79 when the news of the hack came forward. Following the attack, the amount of money that was locked in the protocol plummeted from $1 billion to $575 Million On October 25th. The investors were so fretful that they pulled their deposits back.
Harvest Finance acted accordingly and withdrew all the funds from the shared pools almost immediately after it had completed a fine evaluation of the attack. It began with reconstructing the processes which included DAI, USDC, USDT, TUSD as well as WBTC and renBTC. The funds are currently present in the vaults safely so that they are not exposed to further market manipulation. The hack did not involve DAI, TUSD, WBTC, and renBTC, and the depositors in these vaults were not affected.
How was the hack carried out?
The mechanics of the protocol has allowed for the execution of such an attack. Let us see how:
The investment strategies used by Harvest involves calculating the real-time value of assets that are invested in the base real-time protocols. The value of the assets is then used by the vaults to calculate the number of shares to be used to the user depositing the funds. The same value of the assets is also used when the users take out funds from the vaults.
Payout is then calculated upon the user exit. What also needs to be noticed here is that the assets inside some of the vaults are deposited into shared pools of underlying DeFi protocols. These are subject to market effects such as impermanent loss, arbitrage, and slippage. This means that its value can be manipulated through larger volumes of market trades.
The attacker knew this well and had exploited the impact of the impermanent loss of USDC and USDT inside the Y Pool of Curve.fi by manipulating the asset value to deposit funds into the vaults and obtain the shares for a beneficial price.
The aftermath of the Harvest Finance Hack
Harvest Finance’s Twitter account has been buzzing with messages and activity. The protocol has taken full responsibility for the engineering attack and has ensured that in the future such attacks will be countered and mitigated. The protocol has made it clear that formatting a disaster management plan to assist those who are affected will be the top priority for the protocol.
The protocol is investing its resources to catch hold of the scammers and has already provided a list of Bitcoin addresses of the hacker where it believes that the stolen funds may have moved. It also had taken immediate action by asking prominent exchanges like Binance, Coinbase, and Huobi to block the attacker’s addresses. It further said that there is:
“A significant amount of personally identifiable information on the attacker, who is well-known in the crypto community.” Not willing to dox the cyber-thief, Harvest Finance is now offering a $100,000 bounty “for the first person or team to reach out to the attacker”.
Harvest further tweeted that the $2.5 million returned by the hacker will be distributed to the affected depositors on a pro-rata basis using a snapshot. The attack on Harvest comes only six weeks after the attacker escaped with $8.1 million in Bitcoin from another DeFi protocol BZX, however, BZX managed to recover the funds.