Welcome back to the newsletter curated by the Blockchain and FinTech at Fordham Club!

FORDHAM STUDENTS: CLICK ME TO GAIN ACCESS TO GOOGLE GROUP

Here’s a quick rundown to what we have in store for you all this week:

Table of Contents

• Story 1

• Story 2

• Story 3

• Contact Information

TODAY’S TOP FIVE MOVERS

DeFi is on the Rise, But What Exactly is it?

Kraken, the popular cryptocurrency exchange platform, recently announced that they will be launching their own blockchain for DeFi trading and lending in early 2025. This will make DeFi more accessible and user-friendly. DeFi is not new, but it can be challenging for newcomers to understand, so let’s break it down.

DeFi is short for decentralized finance, and to understand it, you must first understand the centralized finance systems currently in place. Today, when you make any sort of financial transaction, for example transferring money to a friend, this transaction goes through a middleman, typically a banking institution. The bank verifies that you have enough money in your account to be able to send the desired amount to your friend and then approves the transaction. Decentralized finance, as the name suggests, removes this middleman by handling transactions using blockchain and cryptocurrency. When you make a transaction, such as sending money to your friend, it is recorded in a ledger on the blockchain and is verified by multiple parties on the blockchain.

One notable benefit of DeFi is that it makes fraudulent transactions nearly impossible, since the fraudulent ledger would not match the rest of the ledgers and would therefore be rejected. Now that you know the basics, will you be utilizing Kraken’s new DeFi blockchain?

Contributor: Taylor Clark

Sources + further reading:

Public vs Private Mempools

Mempools, or memory pools, are a part of the blockchain that works to ensure the smooth processing of transactions. These Mempools act as a waiting room for transactions until a miner verifies the transaction and the transaction is put on a block. While this process does provide a smooth transaction process, there is a limbo time when this information is typically publicly available, which presents an opportunity for exploitation. Due to the volatility of cryptocurrencies, a parameter called “slippage” is employed, which gives a margin of difference between the price the trader pays or receives and the actual price at which the order is filled. This process can be exploited by a third party by artificially inflating the price of a cryptocurrency by making a trade in front of yours, which elevates the price above the allowed slippage variation, making your trade cost more. The third party would then make a sell order benefiting from your increased cost. This process is called a sandwich attack.

This is where private Mempools come into play. Private Mempools offer a secure waiting room where the transactions are hidden from malicious third parties. Some private Mempools, such as OMNIA protocol, even boast more efficient transactions. While these private Mempool alternatives are becoming increasingly more common, some view this as the creation of a middleman threatening a system based on decentralization.

Contributor: Leehman Wood

Sources + further reading:

Why are we in a crypto bull market right now?

The global crypto market capitalization has reached $2.94 trillion as of November 13th, 2024 and is expected to continue to rise. The victory of the new president-elect Donald Trump has majorly contributed to the rapid increase and swell in the crypto market and, specifically, Bitcoin reaching all-time highs in the past couple of days. The maintenance of the bull market trend is largely due to movements in the crypto market that have previously taken place. The unlikely announcement on September 18th of the Federal Reserve’s movement of a 0.5% point cut in interest rates increased liquidity and risk appetite, boosting the crypto market capitalization by 4%. Additionally, the Bank of Japan (BoJ) maintained the interest rate in times of global uncertainty while the yen was surging. This caused many investors to unwind positions in cryptocurrencies. These trends are just the start of a significant upward trend. While the trends are promising, investors should remain cautious and continue to look ahead to make informed decisions.

Contributor: Vandana Murugan

Sources + further reading: