Latest crypto news: Avalanche’s (AVAX) blockchain at the forefront of experimentation by institutional users in the on-chain world.
The Avalanche (AVAX) Spruce testnet will be used by Qredo to explore the potential of DeFi. How did the AVAX coin react to the news?
All the details below.
Summary
Qredo and AVAX: the Avalanche Spruce testnet will be used to test the potentials of Web3
Qredo, a leading provider of institutional-level digital asset self-custody services, recently announced a partnership with Avalanche’s blockchain.
The infrastructure backbone of the AVAX coin is spearheading a series of experiments in the DeFi world to allow Qredo’s team to explore operational solutions for on-chain exchanges.
In detail, the Avalanche Spruce testnet will be the network used by the company to understand what the potential of digital finance could be in their business operations.
These are the words of Julien Uchcorne, CCO of Qredo:
“We are excited to experiment with this technology to determine its suitability for institutional workflows and its potential to reduce costs, thus adding value for our users.”
This is an important step for Avalanche that will bring institutional clients closer to the DeFi world.
Typically, decentralized finance products such as AMMs, farming pools, and lending and borrowing platforms are seen by institutional users as dangerous and difficult to use.
The partnership will serve precisely to overcome the technological barrier hurdle in order to experiment with alternative solutions for trading digital assets.
By using tokens with a fictitious value on a test blockchain, institutional participants will be able to independently test the functionality of the Avalanche network architecture without putting capital at risk in risky transactions.
The research and development areas that will be most closely explored are foreign currency exchange and interest rate swaps.
In this context, the advantages of the on-chain world include reduced counterparty risk and automated settlement mechanisms that ensure compliance with particular clauses on cross-border payments.
The areas of tokenized stocks, credit issuance and fund management will also be considered in this testing period.
When onboarding, selected addresses in Qredo’s wallet will have guaranteed access to Avalanche’s test blockchain where on-chain movements will be monitored.
The non-custodial wallets used in this process will be Metamask and Wallet Connect.
Qredo joins forces with Avalanche Spruce Testnet as a key partner🤝
Together with @Avax, we'll unlock the benefits of on-chain trade execution and settlement for diverse applications and #digitalassets🔓
Uncover details 👀⬇️
https://t.co/FfwN6Lx4ql pic.twitter.com/06uNxqU6Ct— Qredo (@QredoNetwork) April 12, 2023
What are the risks of Web3 and DeFi?
The potential of DeFi and decentralized applications built on blockchain is vast.
However, in order for the benefits of DeFi to be fully understood by institutional users and not just the various niche “degens,” there needs to be a transition period in which these individuals can freely explore this complex world.
Indeed, the adversities and risks underlying the decentralized finance industry are many.
First, the use of non-custodial wallets (such as the Ledger) presupposes a basic understanding of basic Web3 mechanisms such as sending and receiving cryptocurrency capital, as well as an awareness of the importance of private key custody.
As the famous saying in the crypto world goes : “Not your keys, not your coins.”
Furthermore, it is important to understand the interaction with the various smart contracts of decentralized applications is a serious risk for those without experience in the field.
Hundreds of bogus websites are often created ad hoc to appear completely similar in interface level with the official website, with the sole purpose of siphoning off funds from less attentive users through the approval of malicious contracts.
Even the complex mechanisms of liquidity pools can cause significant losses to be generated by those unfamiliar with the concept of impermanent loss.
Not to mention the liquidation risks on decentralized credit and debit platforms: very frequently market manipulation phenomena designed to cause liquidation cascades to occur on the price of a cryptocurrency.
The collapse of the UST stablecoin stems precisely from the manipulation of “whales” that caused LUNA (partial reserve of UST) to lose value so quickly that the peg for the stablecoin created by Do Kwon could not be recovered and consequently the entire project failed.
For us Web3 enthusiasts, these dynamics are certainly not new and still represent high-risk operational solutions.
For those unfamiliar with such financial products, operating in such areas could be a risky and premature move.
The partnership between Qredo and AVAX’s blockchain sub-network, namely Avalance Spruce is seen as a good omen to ensure that experimentation and R&D takes its course in the education path that institutional players must necessarily go through in order to enter the world of DeFi without taking risks.
Reaction of the AVAX crypto to the news of the partnership between Avalanche and Qredo
The AVAX (Avalanche) crypto does not seem to have taken much notice of the news since there has been no consistent price movement.
However, over the past 4 days the cryptocurrency has marked only green candles on the chart creating the conditions for a continuation of the bullish trend in the short term.
On the daily chart, prices are currently compressed between the 5- and 10-period fast moving averages and between the 50-period moving average.
On the weekly chart, it is possible to observe the formation of a “bull flag,” which increases the probability of a bullish continuation.
However, there is still a long way to go before determining a return to the values of the previous bull market.
The next consistent resistances for AVAX are located at $20, $23 and $30; only after breaking through the psychological threshold of $30 will it be possible to assess the feasibility of an attack on the local top of $40 touched in May 2021, the date when an “M” structure began to form on the chart.
From there on we can officially decree a return of the bull market for AVAX, however it is important to understand that there is still a long way to go, hence traders should be careful not to get emotional.
Right now AVAX is registering a price of $18.50 with a market capitalization of $6 billion and volumes up in the last 24 hours by 80% for $311 million worth of trades.
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