London blockchain venture builder Coinsilium(AQSE:COIN) is pivoting into a surging growth industry.
And the market is responding, with shares advancing by more than 10% inthe last two weeks alone on rising volume.
The company has in its hands the world of decentralised finance, orDeFi for short.
The numbers involved are scarcely believable as retail andinstitutional capital floods in.
In just the last 30 days, the total value in these new financialproducts has more than doubled to more than $9 billion.
Coinsilium is moving to profit here by investing in the infrastructurethat underpins not just DeFi, but an entire emerging industry.
Bitcoin booms again
As central banks switch from cautious inflation targets to unfettered trillion-dollarmoney-printing programmes, safe haven stores of value like gold andcryptocurrencies have been the biggest beneficiaries.
And cryptocurrency is deep in the throes of a new bull market. Thatsbeen shown as the price of Ethereum just hit a 19-month high.
Meanwhile, the Bitcoin price has stabilised above $11,500 per coin,surging 110% since March.
That makes it one of the worlds best-performing assets. Far beyond the38% added to the gold price.
Analysts have put a near-term $16,000 price target on the worlds largest cryptocurrency.
Smart contracts,smarter business
The first breakout star of DeFi is cryptocurrency lending.
All loans are carried out automatically by what are called smartcontracts pieces of code that stipulate the terms of loans and how and whenthey must be paid back.
Smart contracts are already part of English law. A panel of top UKjudges and regulators confirmed that they constitute binding legal contracts back in May 2019.
So there is growing faith in what has often been something of aregulatory Wild West for investors.
And this is where Coinsilium comes in.
The firm began a JV with Singapore tech firm IOV Labs in January 2020 to promote the adoption of the RSK blockchain.
RSK is building projects that use Bitcoin smart contracts.
Most smart contracts are currently based on Ethereum. But there is ahuge gap in the market for smart contracts based on Bitcoin.
And there are a near-infinite number of potential uses for Bitcoinsmart contracts.
For example, Californias prime energy agency is now trialing RSKs Bitcoin smart contracts as a way to bring more transparency and liquidity to carbon credittrading.
As with other smart contract projects, auto-executing code sets out theterms and conditions of each carbon credit trade.
Digital tokens represent a companys share in the process.
Today carbon credit trading is not digitized, explains Eduardo Javier Munoz, CEO of one of the businesses taking part in the pilot. It is a very unconventional market. Now it will be easier to hold [credits] and trade them.
Digitizing carbon credit reporting creates new opportunities forbusinesses to redeem these credits but also makes participation much cheaper.
The bridge betweenold and new
RSK builds products using Bitcoin smart contracts.
What is crucial to the growth of this business is a key feature calledan interoperability bridge.
RSKs developers have managed to link the Bitcoin and Ethereumblockchains together so that smart contracts work well on both platforms.
When a user transfers any token, the bridges smart contract locks theoriginal and creates a corresponding amount of new tokens on the otherblockchain. Ethereum-based tokens can be transformed into RSKs RRC20 tokens,and back the other way.
Interoperability has been a cornerstone of the RSK vision from the start. We believe being able to offer Bitcoins benefits to Ethereum users and to connect these respective developer communities is a crucial step for the blockchain ecosystem as a whole. Adrian Eidelman, RSK Strategist, IOV Labs
Bitcoin and Ethereum are the two largest and most-used blockchains inexistence, but processes tend to remain isolated and segregated to eachnetwork.
As industry website Coindesk notes, interoperability makes it much easier for projects to operate ondifferent blockchains and take advantage of things like faster transactionsspeeds and lower costs.
Projects can cater to a broader base of users who would otherwiseremain siloed in closed networks. So it is a huge usability upgrade.
Fast growth, moreuses
Those utilising RSKs model include Bitcoin stablecoin protocol Moneyon Chain. The project says it will use the RSKBitcoin-Ethereum bridge to cross its stablecoins into the Ethereumecosystem.
Today, the advantages of building Decentralized Finance [DeFi] applications for Bitcoin on top of the RSK Network are far superior in terms of security and other features compared to putting it on top of Ethereum. Max Carjuzaa, Money on Chain co-founder
Making the system blockchain agnostic opens up a vast potential newmarket and user base for smart contracts as a whole.
Effectively, people who own Bitcoin can use their holdings in RSK tointeract with Ethereum-based smart contracts.
And there are far more retail and institutional investors who ownBitcoin than Ethereum.
Bitcoin dominates the cryptocurrency market. Theres a reason why it isused as shorthand for the entire industry and the most easily recognisabledigital asset.
Fidelitys 2020 Asset Management survey found 36% of large US and European institutions, including hedge funds,investment advisors and pension funds, own digital assets. 25% hold BTC, while11% hold ETH.
That means there is a huge amount of untapped power in opening up smartcontract projects to Bitcoin owners.
AndCoinsiliums link withRSK gives it direct access to the largest growth area of this fast-movingtrend.
See the rest here:
Coinsilium backs RSK as Bitcoin and DeFi rocket (COIN) - Value The Markets
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