Can someone ELI5 how AMMs work?

Best General RenVM Questions of April 2020

Best General RenVM Questions of April 2020
\These questions are sourced directly from Telegram*
Q: Quick question here, but any plan to bridge as well with the Tezos protocol? Using soon to be released Ren network could be a key advantage to be the first with a viable solution on their protocol. Plus Ren is indépendant of ETH (collateral speaking) making it interesting for other protocols.
A: Yes, this is very much possible. RenVM can work with any ‘destination chain’ that has smart contract functionality. We’ll be exploring others like Polkadot, Tezos, etc.. once it makes sense and we are happy with the Ethereum side of things.
Q: How many physical Darknodes will be in Greycore?
A: It depends on the final cohort, but it’ll be 15+ as each team will run a few Darknodes. Even the Greycore, our most “centralized” part of RenVM (at first) will be more decentralized than all competitors. Also, it is not so important the number of nodes as it is the number of members. More nodes = more architectural decentralization, but not more political decentralization. That is, more fault tolerance, but not more Byzantine fault tolerance.
Q: Once RenVM gets going, is there a way to measure cross-(on)chain volume?
A: We’ll be measuring any/all volume that flows through RenVM. This info will be available in the new Command Center (CC), GraphProtocol, etc.
Q: What is the reasoning for disabling auto-updates for Darknodes? Will operators get to choose if auto updates are allowed or not?
A: Auto updates of things that control funds is generally a bad idea. Someone could poison the repo you’re using for updates and you’d have no control. Further, disabling auto-updating means that governance is in the hands of the Darknodes, albeit in a very ad hoc way (excluding the smart contracts on Ethereum).
Q: I know you have addressed this before, but here’s a discussion about ren’s ability to mint renBTC being limited by its public market cap. I think the team is coming up with a way to have the Darknode capacity determined by Darknodes based on revenue rather than the price of ren right?
A: This design is one of RenVM's biggest comparative advantages over other designs. The value of REN (as calculated by Darknodes) and thus RenVM's capacity are directly tied to usage of RenVM. The more renBTC minted/burned, the greater Darknodes' revenues, the higher value of REN, the greater capacity to mint more. It's a positive feedback loop where increased usage increases capacity. To your question, the "3" in L<3 will be calculated by Darknodes strictly by revenues, not by a potentially manipulable oracle. Although this may be a soft cap in Zero and One with Greycore secondary sigs and continuous fees.
Conversely, tBTC's bond is overcollateralized by ETH, which is uncorrelated to usage of tBTC. Because the price of ETH does not increase with usage of tBTC, increased usage of tBTC will require more and more ETH to stay overcollateralized. As the article says, just 1% ($1.34B) of BTC's market cap ($134B) in tBTC would require $2.01B in bonded ETH, which is 10% of all ETH. 5% of BTC in tBTC, 56% of ETH.
A bond whose value is tied to usage of its own network allows capacity to scale linearly.
Further: Collateral is not the problem. Any technique that anyone uses to reduce collateral should be usable by any system doing interop. The real difference is that RenVM using its own token, so it is able to adjust its own economic parameters, and it does not need liquidation which we have seen fail as recently as last month.
-Use RenVM => REN worth more => higher cap => can use RenVM even more
-Use tBTC => ETH fluctuates independently => liquidations can occur => node operators get liquidated => can use tBTC less
RenVM is much more capital efficient in the long-term, regardless of the specific collateral ratios required. It also doesn’t expose Darknodes to ETH risk (and even renBTC holders, if renBTC could sometimes only be reclaimed for ETH not actual BTC, like it systems with liquidation).
Lastly, it has a bunch of practical defenses, like constantly shuffling its Darknode shards (instead of them sticking around for up to 6 months). And we have some nice UX features, like being able to move any amount of BTC at any time, straight into a smart contract call.
Q: At the end of the article Ren's security model is briefly discussed, is this correct?
A: For the record, that is an incorrect summary (either through not being sure how things works, or in an attempt to discredit our security model). RenVM is not a federated peg. Our shards are designed to have up to ~200 nodes in them. tBTC has three (3). Seems the latter is a lot closer to a federation than the former.
Q: So RenVM can run on Binance chain instead of Ethereum? Or what would be the advantage (or goal)? Pls eli5. A: RenVM doesn’t run on any chain; it is its own network. However, it has host chains which are chains to which it can send assets. For example, you can send BTC to Ethereum, and in this scenario Ethereum is the host chain (it is hosting a non-native asset). Supporting Binance Chain would imply that RenVM can use it as another host chain.
Q: If another host chain is implemented, would cross-host chain transactions be possible without doing any transactions with the token. Like: Bitcoin -> renBTC_ETH -> renBTC_BNB
Without an intermediate step, and without paying Bitcoin transactions on the Bitcoin network. Unlike: Bitcoin -> renBTC_ETH -> Bitcoin -> renBTC_BNB
A: Yep. A burn event would be generated on one host chain, and RenVM would produce a minting signature for the other host chain. No BTC moves on the Bitcoin chain, so no Bitcoin fees would be required. RenVM would still take a fee though.
Q: Reading about sharding in the docs: it mentions load balancing. Would that be done on a monthly basis as the changeover in keys is done?
A: At minimum, once per epoch.
Q: I'm sure there were discussions about this before but I can't find anything on it. Is there a possibility where assets in custody in REN network could be greater than 1/3 of value of REN tokens and have the network still be secure? Or is this a big no no that the network will have to do everything for the 1/3 threshold not be crossed ?
A: It’s not a big no no, it is still well collateralized at that point. However, it is a no no. 1/3rd is the limit above which an attack becomes theoretically profitable. It is still not practically profitable at that stage, and is also very difficult to actually pull off such an attack. So RenVM must aim to keep under 1/3rd, but if that threshold is crossed nothing bad happens immediately (this gives some time for fee adjustments that should have already been put in place by this point to kick in).
We’re also looking at some proposals internally around how to recover the peg even if an attack does succeed (because 1/3rd is crossed by enough, and for long enough, that a profitable attack succeeds, or because an irrational attacker has decided to attack without the want for profit).
That’s correct. We class these actors as “irrational adversaries”. This is an attacker that doesn’t care about the profitability as modelled by the protocol. It’s important to be able to resist such adversaries because, as you point out, there are adversaries that can achieve be profit from RenVM in a way that cannot be feasibly modelled.
Q: How many hours can my VPS be down before it's Deregistered (not shalshed)?
A: 12 hours. We’ll use Mainnet Subzero to establish parameters and change the thresholds if needed.
Q: Which VPS provider (for Darknodes) is next?
A: Azure is the next one on our list of VPS’s to support.
submitted by RENProtocol to RenProject [link] [comments]

Understanding price of alt coins

I hold multiple coins but for this example I'm going to talk about my enjin.
Yesterday it was around 2200 Sat's which according to binance was worth around 21 cents.
Today its at 1990 Sat's but because bitcoin has gone up the USD price is showing as 25 cents.
I can't get my head around whether this is good or bad for me? Can someone ELI5 please...
submitted by cilan312 to CryptoCurrency [link] [comments]

Hey All, New guy here!

Hello Binance,
I am new to this whole deal of E-currency and my knowledge is quite limited as of now. The reason I am getting into this now is because I have heard of the tales of NEO and BNB being on a huge incline in the near future.
I have done some research on my own and was able to set up accounts with Binance and Coinbase because it seems like the general process for trading these is to buy bitcoins from coinbase and transfer them to binance.
Now to test my curiosity I played around with $20 with these two websites and I was able to purchase a few measly bits of BTC and transferred it over to my binance account without any real flaws. Now here comes the part where I assume I made a trade for my BTC to NEO coins using the instant buyer on the exchange page.
My questions to you nice folks would be:
  1. Was this process done correctly?
  2. How do you know when you should buy/exchange your coins.
  3. When making purchases on Binance, should you be changing the "price" amount or use the auto-filled amount set up by the site.
  4. Does it matter if you originally buy BTC/ETH/Litecoin from coinbase if you plan on instantly transferring it over to binance and then swapping it out for another currency.
  5. What is the process used to convert the coins back into real money?
Thank you for anyone who takes the time out to read my post and any help will be appreciated!
edit: Could someone ELI5 why a wallet is important? There seems to be a benefit of always moving NEO over to a wallet as soon as it is exchanged for from Binance.
submitted by C_ImGoingPro to binance [link] [comments]

Most Realistic Bitcoin Price Prediction for June 2020 ... How I Made +40% PROFIT Trading Bitcoin In 1 DAY ... Latest Cryptocurrency News  Bitcoin Analysis & Price ... BITCOIN NEWS: Bitcoin Price FALLING Due To Manipulation ... I’ve Changed My Mind on Binance!! BNB #1 Altcoin!? Bitcoin will crash 75% soon in 2020 before the 2021 BTC ... MAJOR PRICE ACTION  Bitcoin, Ethereum, XRP, Binance ... Ethereum Whale Sell Off - Bitcoin Price At $13,700 ... Binance CEO Makes Rare Price Prediction—Says This Is When ... Binance Buying CoinMarketCap & Why It's Great for Bitcoin Price

Can someone explain what's the point in buying tokens? I've got small amounts of CRO, DOT and XRT because I thought the projects looked great. But I've been thinking about it, what are they for, is it just speculating? The DOT is also to be able to vote as I understand, but I'm starting to think, what is... Binance is a blockchain ecosystem comprised of Exchange, Labs, Launchpad, and Info. Binance Exchange is one of the fastest growing and most popular cryptocurrency exchanges in the world. Founded by a team of fintech and crypto experts — it is capable of processing more than 1.4 million orders per second, making it one of the fastest exchanges in the world. The platform focuses on security ... ADA/USDC Binance price chart in real-time. Stats on multiple timeframes, order book, news and trollbox. Coinalyze. Futures Data. Individual Charts; Global Charts; Technical Analysis. Bitcoin Ethereum Ripple Bitcoin Cash Binance Coin Chainlink Cardano Litecoin Bitcoin SV EOS Coin Monero Tron Stellar Lumens Tezos NEO UNUS SED LEO Cosmos NEM Iota Dash VeChain ZCash Ethereum Classic ... Buy Bitcoin on Binance! Is this good for Bitcoin or Ethereum? This is a difficult question to answer. Let’s try to consider both sides of the argument. So, how can this be good for Bitcoin? Well, it arguably increases the utility of Bitcoin. While many will argue that Bitcoin doesn’t necessarily need more functionality, it could maybe use some. With all the buzz and hype around blockchain in 2020, it’s no surprise that you want to get in on the action.. This is why we created this all-in-one guide made so simple that we basically “explain it like you’re five” (ELI5 blockchain).. Throughout this introduction to blockchain guide, you will be unlocking the mysteries behind all of the blockchain basics - how Bitcoin works, what ... Many people have been talking about automated market makers (AMM) and how they helped boosting liquidity for many tokens. However, I can't really understand how these work. Specifically, how do they make money (or at least how they don't loose it). Thanks in advance! submitted by &#32...

[index] [3076] [21815] [7370] [21931] [3275] [14830] [13798] [17492] [998] [6867]

Most Realistic Bitcoin Price Prediction for June 2020 ...

Join Binance Here: 👉-10% Discount Code For Binance Futures Referral is → 41297141 👉GET My Technical Analysi... Bitcoin's price in 2020 is climbing! So let's look at real data! Real "on-chain" metrics to see the best bitcoin price prediction 2020 going into June, July,... In todays video we discuss the bitcoin and ethereum price movements. We also go over a whale who has sold 4000 ETH on binance. Last but not least we go over ... We do a technical analysis of the top cryptocurrencies to see which ones are performing better than others. We look at the price action of bitcoin, ethereum,... In today's video, we take a look at the binance expected acquisition of coinmarketcap and whether or not this is good for crypto. If you would like to be highlighted on my channel please reach out ... 09:25 Binance & the Tether Cartel 11:54 Binance is Not Reducing Tether USDT Holdings 13:02 You Can't BS A BS'r: Binance Will Fail 13:48 Stop Using Binance! 14:12 Outro 📺Watch These Videos Again📺 NordVPN 70% OFF: Bitcoin Technical Analysis & Bitcoin News Today: I'll use technical analysis on the Bitcoin price to make a Bit... #Binance CEO Makes Rare Price Prediction—Says This Is When To Buy #Bitcoin Narrated by The #Cryptocurrency Portal on Wed. Feb. 26th, 2020 We send out daily u... I believe we're only a week away before bitcoin starts crashing down 75% from its current price. I show how and why this will happen and why this last 2020 B... Latest Cryptocurrency News Bitcoin Analysis & Price Prediction Samsung Travala Binance Etc. Latest cryptocurrency news today in hindi Video covers th...