We had the opportunity to interview the co-founder of CoinGecko, Bobby Ong, and hear about cryptocurrency data collection and analysis from different angles of the Crypto market.
Bobby Ong(Co-Founder at CoinGecko)
Interview Date :25th February 2020
Check if people’s claim are True or not
I think back in 2014, things were quite different. A lot of websites were not well designed. Information that you see today can be acquire by just going to a single website to get price market caps etc. All this information that is easily available now was not readily available then. When you would go to the website it wouldn’t create any trust, because it was so badly designed. So we thought that we had a better chance to bring something better to the industry. That was one thing we felt like we could do; data aggregation better than many other platforms.
The second reason for starting CoinGecko was that when we started CoinGecko, nobody was tracking social media and developer stats. People were only tracking price, volume and market cap to some certain extent. Thus, we wanted to know what coins stand a good chance of surviving in the long term. Coins that survive in the long term generally have a good community and a good development team. We spent a lot of time in forums and realized that people were claiming statements like “ you should look at this because this coin has the best development” or “you should look at this because this coin has the best community”, and so we thought that there has to a better way to measure this in finding out what is right and not.
If someone claims that their coin has the biggest community, they can easily back it up by saying ”look we have xx number of people liking us on Facebook, on twitter” or “ we have so many posts and comments, communities and activities on Reddit”. If a coin is dead, there will be none of any of these activities, and you will know that their claims are fake. The same applies for developers; developers can say that they have the best coin, and they can actually back this up due to everything is done in an open source manner. However, you can verify their statements by looking at number of communities that they have and are produced on Github, you can see number of developers contributing to the repository, and you can see the number of people liking it and so on. So we did that, and we thought that all these things can be put together, and sure enough, in our research we saw that some coins did actually have the most development activity and community in social media while others were totally quiet and probably dead.
We now have a Money Market Creator!
To me, it’s very interesting that we now have a money market creator in the sense that you can earn through interest on your Ether, DAI or USDC etc. Before these, you basically had the “buy and hold” strategy. However, now you can earn interest of your investment, the rate depends on the coin and platform. USDC, especially for stable coins, the interest rates offered by many of these smart contract platforms is significantly higher than what is being offered by the banks. So that in itself is a good use-case.
There are a lot of things happening, for example there are a lot of decentralized insurance products that have been built and released. There are risks involved, such as smart contract hacks etc, so I am very glad that the DeFi insurance space is growing. If you look closely, there are native DeFi products that cannot be built before any of this had happened. There is a product, PoolTogether which allows investment lottery with no loss. What happens is that, everybody buys a share. The shares will be put together and send to compound in an interest on the funds collected for one week. Of all the purchases who purchased the shares, one person will be chosen as one winner and get the profit interest, while everybody else is gets their capital back, and so no loss. This is something which cannot be done in a traditional way. It’s a very crypto native project, and I am looking forward to seeing more of these projects being presented to the users in the DeFi space.
Earning with Interest in Crypto
Smart contracts can be pretty complex, so if a hacker finds an exploit they can use it to drain money from a smart contract. This year in February, we saw bZx getting exploited with two hacks happening within a couple of days, and they lost over a million dollar of Ether with the smart contracts. So if you put money in a DeFi smart contract, and the DeFi contract is drained completely, you essentially lose your money. This is a pretty risky proposition if you put money in a contract thinking that you can get an interest rate of 8% or 9% on your USDC. But if that contract gets hacked, not only do you lose your interest but you also lose your capital.
I think there are insurance providers that have come out these days , and two of those are Nexus Mutual and OPYN. These two companies have come out with an insurance policy where you can buy coins with ex. 2.5 % interest rate, and you can buy a cover in case if something would happen. If something would happen to the compound contract, the insurance will pay out the amount of how much you purchased it for. This means that you get your capital back. With the bZx hack, some people had purchased insurance on Nexus Mutual, thus Nexus Mutual paid out because bZx had been hacked.
Interviewer , Editor : Lina Kamada
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The Article published on this our Homepage are only for the purpose of providing information. This is not intended as a solicitation for cryptocurrency trading. Also, this article is the author’s personal opinions, and this does not represent opinion for the Company BTCBOX co.,Ltd.