Coinbase Alt Coin Considerations

Eric

8 min readJan 9, 2021

What is an “Alt Coin”?

Anything other than Bitcoin is consider an “Alternative coin” or Alt coin

Ethereum is the second biggest coin and therefore the largest alt coin by market cap: $140,569,095,622

You can check up the top coins by market cap using: Coin Gecko

Top options on Coinbase?

Blockchain Oracle

Chainlink — LINK
Market Cap:$6,624,275,257

Decentralized Finance DeFi

Synthetix — SNX
Market Cap: $1,791,322,39

Aave — AAVE
Market Cap:$1,356,177,011

Ren Project — REN
Market Cap: $351,820,589

New Financial System

Ripple — XRP
Market Cap: $15,360,870,918

Stellar — XLM
Market Cap: $7,518,969,47

Algorand — ALGO
Market Cap: $393,148,844

Digital Identity

Civic — CVC
Market Cap: $109,833,621

What are oracles within the blockchain ecosystem?

Oracles are third-party services that allow smart contracts within blockchains to receive external data from outside of their ecosystem.

Oracles act as a data source that can be fed into a smart contract, which enables them to access real-time data that isn’t on the blockchain, which is most often the real-time price of assets. Even though oracles themselves aren’t data sources, they are layers that verify on-chain data related to real-world events and then submit the cumulative data to smart contracts.

Why does the DeFi ecosystem need decentralized oracles?

Decentralized Oracles are intermediaries that ensure trust in the $20billion DeFi ecosystem.

Alternatively, centralized oracles offer malicious actors the potential to corrupt data or abuse their power for their own advantage within the network.

A simplified example might look like, a DeFi trading platform could have a smart contract that sells stocks in Coca-Cola whenever the price per share tops $55 and buys more whenever it dips below $50. An oracle like LINK can ensure the smart contract runs smoothly by delivering fast, reliable, and secure data without a central point of failure or malicious tampering.

77 Smart Contract Use Cases enabled by Chainlink

Likely Chainlink Integration with SWIFT GPI— the current global bank settlement system

Oracle partnership with Chainlink

China’s Blockchain Service Network Integrates Chainlink Oracles

Google Integrates Cryptocurrency Project With New Smart Contract Tool

Deeper Dive Into Chainlink

Top players in the $22 Billion USD DeFi space

Synthetix

Synthetix is a token trading platform built on Ethereum.

It allows to creation of real world assets, like stocks and shares to be bought and traded using crypto.

SNX is a cryptocurrency that powers the Synthetix protocol. Synthetix protocol enables trading synthetic assets (derivatives) on Ethereum. SNX tokens provide exposure to assets such as gold, Bitcoin, U.S. Dollars, TESLA, and AAPL within the Ethereum blockchain.
Important to note — the current derivative market is estimated around $1 quadrillion !

Deep Dive into SNX

Aave

Aave is a DeFi lending protocol that enables users to lend and borrow a diverse range of cryptocurrencies using both stable and variable interest rates.

In addition to the typical features seen on protocols like Compound, Aave includes notable distinguishing features such as uncollateralized loans, “rate switching”, Flash Loan and unique collateral types.

Aave leverages a native token — AAVE — that provides holders with governance. AAVE can also be staked for insurance to earn protocol fees and AAVE rewards (passive income).

Aave offers the most diverse range of DeFi collateral of any lending protocol on the market. Backed by strong liquidity and the opportunity to protect against smart contract risk using Nexus Mutual, we’ve seen Aave carve out a significant market share in the DeFi lending market in 2020.

Aave Raises $25 Million to Bring DeFi to Institution

DeFi Meets Real Estate as Aave Readies Crypto Mortgages

Deep Dive into AAVE

Ren Protocol

Ren is a bridge software that aims to incentivize a global network of users to allow anyone to transfer both new and existing assets across different blockchains.

With Ren, users can lock bitcoins in a smart contract, and in return, receive the equivalent of rBTC.

rBTC = a tokenized bitcoin that is locked in Ren Virtual Machine

From there, Bitcoin holders could use Ren to access Ethereum’s suite of decentralized finance (DeFi) products without having to sell their bitcoins or even transferring their assets across blockchains.

Using these Ethereum tokens, a user could even participate in Ethereum’s DeFi ecosystem, including on lending and borrowing platforms such as Compound or Aave. All the while, the user’s bitcoins would remain locked in Ren software.

This is huge people because will want to use their Bitcoin in the DeFi space for lending and borrowing.

Ren’s rBTC makes up about 20% of all wrapped bitcoin.

In August the total amount of rBTC broke 10,000

Deep Dive Into REN

New Financial System

Ripple XRP

Ripple is building next generation financial infrastructure with blockchain technology. Its payment network, RippleNet, offers connections to hundreds of financial institutions around the world via a single application programming interface (API) and makes moving money faster, cheaper and more reliable.

RippleNet is both decentralized and standardized, meaning assets are transferred from one party to the other with no single point of failure. RippleNet also allows customers to source liquidity on-demand via the digital asset XRP, Ripple’s currency, that helps financial institutions eliminate the need to pre-fund accounts in destination currencies for cross-border payments.

Ripple is leveraging XRP specifically to address a $10 trillion problem — trapped capital that is required for cross-border payments.

Ripple has processed over 2 million transactions with a nominal value of $7 billion over RippleNet. Nearly a fifth of transactions over RippleNet today are through ODL, using XRP as a bridge between two fiat currencies. ODL is live in four corridors today, with US to Mexico as the largest. Bitso, a Mexican exchange, recently announced that it is processing nearly 10% of remittance payments with ODL ($35 billion yearly flows from US to Mexico).

Azimo, Europe’s leading digital money transfer service, is currently using Ripple’s On-Demand Liquidity (ODL) solution, through which its customers’ funds will be exchanged into XRP, sent to their destination and re-converted into Filipino pesos.

The Philippines is one of the top remittance destinations globally, receiving $34 billion in 2018.

Ripple announced a new partnership with Mobile Money, a Malaysian mobile wallet company. Through RippleNet, Ripple’s global payments network, Mobile Money has connected to bKash, Bangladesh’s largest provider of mobile financial services (MFS) which serves over 45 million users. The partnership will power seamless wallet-to-wallet payments to serve the remittance corridor between Malaysia and Bangladesh.

Bangladesh has the third largest remittance flows in South Asia, and the eleventh largest worldwide, with Malaysia ranking as one of the top five sources of remittances for Bangladesh.

Ripple exec says 20% of RippleNet transactions occur using XRP

Partnership, Interoperability and Neutral Bridge Currencies: Key to CBDC Success

As the world moves towards the adoption of Central Bank Digital Currencies, XRP is positioned to embrace interoperability. This universal interoperability hinges on the use of open standards and neutral bridge assets optimized for speed, scalability, and cost to free up capital and enable the unrestricted movement of value between CBDCs.

Neutral bridge assets will allow for frictionless value movement between various CBDCs without requiring each one to solve the liquidity challenges inherent in cross-border transactions.

Notable Partnerships

Moneygram
Bank of America
American Express
— Visa acquiring Ripple Partners
Accenture
— Bank of England is an Accenture Partner
Santander
SBI Japan
PNC
Saudi Arabi Central Bank

Stellar XLM

Lumens (XLM) is the native digital currency supported by the Stellar network, the underlying peer-to-peer (P2P) payment network and development platform that allows for near instantaneous transactions across the world.

Together, XLM and Stellar strive to achieve greater financial inclusivity, by connecting entities ranging from merchants and financial institutions to individual users, especially those without access to traditional banking services. The Stellar network also allows for fast, secure, and low-cost conversions across varying units of value (e.g., commodities, fiat currencies, and other digital assets).

XLM and XRP are based on the same technology but are going after different aspects of the global financial market.

IBM Launches A Blockchain-Based Global Payments Network Using Stellar’s Cryptocurrency

Ukraine Picks Stellar Foundation to Develop Its Central Bank Digital Currency and National Virtual Asset Strategy

Thailand’s Largest Bank Selects Stellar-based Blockchain for Cross Border Remittances

German real estate group issues $24M bond using Stellar blockchain

Centre Consortium Announces Stellar as an Official Chain for USDC

OCC Announces: Banks can Use Stablecoins, Blockchains for payments

Visa May Support USDC Credit Card After Adding Circle to ‘Fast Track’ Program

Algorand ALGO

Algorand was born out of the ambition to solve the so-called “blockchain trilemma”, which posits that one cannot have full-blown decentralization, scalability and security on a single blockchain platform, unless at least one component is toned down to accommodate for the others.

In other words, building strong decentralized platform, for example, would mean the trade off of lower security or scalability potential.

The proposed answer to this challenge came in the form of the Algorand platform, which was launched in June 2019 as a global project seeking to promote the decentralization of digital economy based on open and permissionless access, instant verifiability, internally developed Pure Proof-of-Stake protocol, capable of scaling custom blockchain projects.

Algorand is being utilized as the underlying tech for the Marshal Island’s Digital Currency

Canadian Stable Coin Launches on Algorand

Centre Consortium Announces Algorand as an Official Chain for USDC

Full List of Algorand’s Use Cases

Coinbase Launches 6% APY Staking Rewards For Algorand

Digital Identity

Civic

It’s an identity verification platform which is meant to make life easier, not only for the user, but also for the entity who wishes to verify the identity.

Rather than going through a long-winded document verification process, the Civic token enables the verification of identity directly in places where it is accepted. The advantage here is that since it uses blockchain technology, it’s extremely secure and identity theft is highly unlikely!

The Civic coin or Civic token (CVC) is the currency associated with Civic, which thrives on the Ethereum blockchain, primarily exchanged during the identity verification process.