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The cryptocurrency market is in perpetual motion, meaning that no single asset can expect to retain its original value for too long. Such volatility places the portfolios and, therefore the potential profits of investors, at risk. In order to avoid such loss of value arising from price dynamics, investors resort to a tactic called portfolio rebalancing. Portfolio Rebalancing Explained If portfolio rebalancing is to be explained in short, it is the redistribution of available assets through subsequent purchase and sale operations with the aim being their return to original weightings within the portfolio. A simple imaginary case can b

Trading on the open market, especially the traditional stock market, is a very demanding occupation, especially when it comes to the capital required for making entry into the trade and deriving profits. Many traders do not have the necessary capital, or do not wish to risk their savings, when trading on the open market. That is why exchanges and trading platforms offer a convenient and affordable tool for hedging such issues – margin trading. What Is Margin Trading? Also known as buying on margin or trading with a shoulder, margin trading is the use of leverage, or borrowed funds, to enter trades and make larger transactions when tradi

Decentralized asset trading, or liquidity pooling in decentralized finance services, is inextricably connected with the risk of losing funds due to the inherent price volatility of cryptocurrencies. One of the most common reasons for the deterioration of profits and portfolios on decentralized trading platforms is the risk of impermanent loss. Impermanent Loss Explained Impermanent loss is the potential loss of value or profits sustained as a result of the price difference of an asset within the timeframe when it was provided to a liquidity pool and the moment it was withdrawn. The loss will depend on the size of the difference in price

Crypto space is determined by profitability, making select projects attractive from a financial point of view. One of the most important indicators determining the profitability of a project or liquidity pool is the APY – Annual Percentage Yield. What Is APY? The APY is a formula that calculates the rate of returns one can expect to receive from the funds they deposit into a liquidity pool or farming platform. The APY usually includes compounded interest, making the returns users can expect to receive rather considerable over a period of time. Most platforms and liquidity pools indicate high returns of APY for advertising purposes. Howe

The blockchain is a fully-digital system that has no link to the real world. The smart contracts that networks run on have no access to off-chain data, meaning that the blockchain’s application becomes limited to online events. However, the introduction of oracles changes that by creating a link to the outside world. Blockchain oracles are services provided by third parties that feed information about events outside the blockchain to smart contracts. By providing verified off-chain information about real-world events, oracles act as bridges that make blockchain applications in the outside world possible. There are currently three main t

The problem of blockchain scalability requires solutions. One of them was the development of the concept of sharing on the Ethereum network, which entails the breakdown of network data into smaller sections, which are called shards. The shards contain their own packets of data, allowing them to essentially become distinct from others and thus work on strictly assigned sections of network information. The application of sharding can help reduce network latency, as they free up more processing power from each network node. The nodes store and process all network data, and the ability to lessen the load on each will allow them to work more ef