In the context of cryptocurrencies, passive income refers to the ability to earn a consistent stream of income from crypto assets without the need for constant market participation. Passive income can be generated through various strategies, such as staking, yield farming, lending, providing liquidity on decentralized exchanges (DEXs), and many others. Each of these methods offers unique opportunities but also comes with associated risks. 
Mining is one of the ways to earn passive income in crypto. It involves using computational resources to solve complex mathematical problems, thereby securing the network and validating transactions. For this work, miners are rewarded with new coins and transaction fees. However, the high initial setup costs and electricity expenses can act as significant entry barriers into mining. 
Staking offers an alternative to mining where investors lock up their holdings to secure the network. In return, they receive new coins as rewards. This process is integral to Proof of Stake (PoS) blockchains. The rewards depend on the staked amount and the duration of the investment. 
Yield farming and crypto lending are popular passive income methods in decentralized finance (DeFi). Yield farming involves lending your crypto to a DeFi protocol in exchange for fees or other tokens. This can be highly profitable but also comes with risks, such as impermanent loss. Crypto lending lets you earn interest by lending your tokens to others through a platform, which manages the loan and repayment processes. One of the risks is the borrower's potential inability to repay the loan.
Providing liquidity to a DEX is a way of depositing pairs of tokens into liquidity pools, facilitating trading against that liquidity. In return, you receive a portion of the trading fees. The revenue you earn depends on the platform’s trading activity and revenue share model.
Learn more: A Beginner's Guide to Earning Passive Income With Crypto.

🔥 Binance Highlights
Binance showcases the improvements made to the Binance ecosystem during March.Binance Blog shares various instruments that are more likely than crypto to be used for financial crime.Binance Blog discusses the Binance Affiliate Campus series.Binance completes the integration of USD Coin (USDC) on the CELO network.Binance introduces Renzo (REZ) on Binance Launchpool.

🗞️In The News
The Securities and Exchange Commission (SEC) of Thailand is set to block access to unauthorized crypto service providers.Sam Bankman-Fried has reached a settlement agreement with a group of FTX customers who had filed a class action lawsuit against him.Consensys files a lawsuit against the SEC over Ethereum’s classification.Tether announces a freeze of wallets linked to the evasion of sanctions in Venezuela’s oil industry.Crypto industry groups sue the U.S. SEC over a widened definition of a “dealer”.
📖Binance Academy Knowledge
What Is Ethereum and How Does It Work?What Is Tether (USDT)?4 Trading Strategies With Moving AveragesWhat Are Airdrop Scams and How to Avoid Them?A Beginner’s Guide to Binance Earn

A stop-limit order is an order type that combines elements of stop orders and limit orders, enhancing control over trading outcomes. It enables traders to set specific prices for entering or exiting the market, as well as define the maximum or minimum price they are willing to accept, allowing them to mitigate significant risks and increase their chances of success. 
At its core, a stop-limit order activates a limit order once the market reaches a predetermined stop price. When setting up a stop-limit order, a trader sets two prices: the stop price, which triggers the creation of a limit order, and the limit price, which is the specific price point at which the order is executed. This can be particularly useful in highly volatile markets. 
Let’s imagine a situation when a trader wants to buy a cryptocurrency if its price rises above a certain level, signaling a potential upward trend. If the cryptocurrency is trading at $300, the trader might set a stop order at $310 and a limit order at $315. This means that once the price hits $310, a limit order to buy at $315 or lower will be automatically placed (see image below). This helps the trader secure a desired maximum buy price without having to constantly track the market.
A stop-limit order can also be used for selling. If a trader has purchased a cryptocurrency at a lower price and it increases to $300, they might set a stop-limit order with a stop price of $289 and a limit price of $285. If the price drops to $289, a limit order to sell at $285 or higher is activated (see image below). This helps the trader secure a desired minimum sale price without hA stop-limit order can also be used for selling. If a trader has purchased a cryptocurrency at a lower price and it increases to $300, they might set a stop-limit order with a stop price of $289 and a limit price of $285. If the price drops to $289, a limit order to sell at $285 or higher is activated (see image below). This helps the trader secure a desired minimum sale price without having to constantly monitor the market.
Stop-limit orders have many distinct advantages. For instance, they empower traders to precisely plan trades and ensure their execution at desired price levels. In addition, stop-limit orders allow for effective as they let traders set orders that are automatically triggered when a cryptocurrency reaches a particular level, preventing significant losses in case of sudden price fluctuations.
However, stop-limit orders come with their own set of risks. One of them is the risk of non-execution. If the price skips over the stop price or if market conditions change rapidly, the limit order may not execute. Furthermore, the limit price may not be reached in fast-moving markets. In both cases, the position is left open and traders are exposed to significant risks.
Learn more: What Is a Stop-Limit Order?

Key Takeaways

Binance P2P facilitates direct peer-to-peer transactions, eliminating the need for intermediaries and providing a seamless trading experience for users worldwide.

The Binance P2P platform offers enhanced security measures, 24/7 customer support, fast transactions, and support for 800+ payment methods and 100+ fiat currencies.

The platform provides accessibility and convenience to both novice and experienced traders. Users can get started with Binance P2P in a few simple steps.

Introduction

Binance P2P offers a seamless trading experience to cryptocurrency users, bridging the gap between buyers and sellers across the globe. Let's delve into the basic mechanisms and interface of the Binance P2P platform.

What Is P2P Trading?

Peer-to-peer (P2P) trading refers to the exchange of assets directly between users. Also known as person-to-person trading, P2P embodies the essence of decentralized exchange, as proposed by Bitcoin’s creator, Satoshi Nakamoto. 

Satoshi introduced Bitcoin in 2009 as a P2P electronic cash system that allows individuals to directly engage in buying, selling, and trading cryptocurrencies without the need for intermediaries. However, traditional P2P models involved security and compliance risks, so Binance stepped in to redefine the landscape with the introduction of Binance P2P, making the practice safer and more accessible to cryptocurrency users.

What Is Binance P2P?

Launched in 2019, Binance P2P revolutionized the way users engage in P2P currency exchange. Acting as a peer-to-peer marketplace, Binance P2P facilitates direct trades between users, enabling seamless transactions in a variety of cryptocurrencies and fiat currencies. 

The Binance P2P platform offers enhanced security measures and an extensive array of features, making it the go-to destination for both novice and seasoned crypto traders.

Binance P2P Glossary

To navigate the Binance P2P platform efficiently, it’s worth getting familiar with some of the key terms:

Funding Wallet: Binance accounts have different types of wallets for different trading purposes. The Funding Wallet is a dedicated wallet for P2P trading, where cryptocurrencies obtained from P2P transactions are stored.

Ad: A user-generated offer detailing their price and trading requirements, such as asset type, payment methods, and other terms.

Order Limit: The specified range of minimum and maximum amounts for buying or selling assets in a particular ad.

Payment window: The time frame during which payments must be sent or received for a transaction.

Average release time: The average duration within which a seller releases cryptocurrency after receiving payment. You can check a user’s Avg Release Time by clicking on their nickname or Ad.

Pay time: The deadline for buyers to complete payments.

30d Trades: The total number of completed trades in the past 30 days. 

30d Completion Rate: The ratio of completed orders to canceled orders in the last 30 days.

You can check the 30d Trades and 30d Completion Rate by visiting a user’s profile page.

Appeal: A mechanism for resolving disputes between buyers and sellers with the help of Binance customer support.

Maker: A user who creates P2P advertisements on the platform.

Taker: A user who executes trades using existing P2P advertisements.

P2P Merchant: Users providing liquidity and payment solutions on the platform.

Advantages of Binance P2P

Binance P2P offers a myriad of benefits, including:

Escrow service: Secure holding of cryptocurrencies during transactions, mitigating risks of theft and fraud.

Diverse payment methods: 800+ payment methods and 100+ fiat currencies supported, ensuring accessibility for users worldwide.

Swift transactions: Reduced waiting times, with transactions completed in as little as 15 minutes.

Price control: trade crypto with the freedom to choose your seller or set your own price.

24/7 Customer Support: Comprehensive assistance in multiple languages, ensuring a seamless trading experience.

Getting Started With Binance P2P

Embark on your journey with Binance P2P through these simple steps:

1. Register an account on Binance.

2. Complete the Identity Verification (KYC) process.

3. Set up your preferred payment methods.

4. With your account verified, you can start using P2P as a buyer right away. We will cover how to buy and sell in more detail soon, but both can be done easily with just a few steps.

As a buyer:

5. If you plan on selling crypto via Binance P2P, you will need to transfer your assets to your Funding Wallet first. 

As a seller: 

6. At the top right corner, you can find user guides, check your P2P orders, and access the P2P User Center. You can also manage your payment methods and P2P ads.

7. On your P2P User Center, you can edit your profile and find more details about your payment methods, feedback received, blocked users, and more.

How to Buy on Binance P2P

1. Browse ads on Binance P2P and select suitable trades based on your requirements. There are multiple filters available to help you find what you need.

2. To place a buy order, find the ad that you want and click the buy button to start the process.

3. Make sure you agree with the advertisers’ terms before placing your order.

4. When ready, place the order and pay the seller. This step will be different depending on the location and payment method.

5. Wait for the seller to confirm the payment and release your crypto.

How to Sell on Binance P2P

1. To place a sell order, find the ad that you want and click the sell button to start the process.

2. Make sure you agree with the advertisers’ terms before placing your order.

3. When ready, place the order and wait for the payment.

4. Confirm that you have received the payment and release the funds.

Closing Thoughts

Binance P2P offers a secure and efficient P2P platform with support for hundreds of payment methods and fiat currencies. The process is now much easier than the traditional P2P services. With Binance’s safeguards and customer support, users can navigate the world of digital assets with confidence and peace of mind.

Further Reading

A Beginner’s Guide to Binance Earn

Your Guide to Binance Launchpad and Launchpool

Your Guide to Binance Spot Trading

How to Stay Safe in Peer-to-Peer (P2P) Trading

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

Proof of Reserves (PoR) is an audit that aims to prove that a custodian holds all its clients' funds securely. In the field of cryptocurrencies, PoR is vital for ensuring that all funds on an exchange are fully backed by actual assets. This type of audit is typically conducted by independent third parties to prevent any potential data falsification by the custodian undergoing the audit.
Let’s go through a typical PoR verification process. First, an auditor takes a snapshot of all account balances. Then, they use it to create a data structure known as a Merkle tree, which helps efficiently organize and verify large sets of data. Each user's balance is converted into a data point, or "leaf," in this tree. A group of “leaves” can then be hashed to form “branches”, and “branches” hashed to form the “root”. The auditor can then use various cryptographic methods to verify that each user's balance is correctly included and backed. 
That’s how PoR audits allow users to confirm that the balances they see in their accounts on an exchange are not just numbers but are actually backed by real assets. This promotes transparency and can increase trust in centralized exchanges (CEXs). In addition, these audits discourage the platforms from engaging in risky financial practices, such as using user deposits for internal investment or lending. Essentially, PoR ensures that exchanges operate more like vaults rather than banks, holding deposits securely without reallocating them elsewhere. 
Despite its benefits, the PoR system has limitations. Since these audits provide a snapshot in time, they can only confirm that the reserves were accurate at the moment of the audit. This means that there is no guarantee that the reserves have not been tampered with immediately after an audit. Furthermore, the effectiveness of a PoR audit can depend on the competence of the third-party auditor and their independence from the audited exchange. 
Learn more: What Is Proof of Reserves and How it Works on Binance

People usually start investing in cryptocurrencies through spot trading, which involves the direct buying and selling of assets. However, once they accumulate crypto assets, many investors face the dilemma of how to effectively manage them when not actively trading. This is where Binance Earn comes into play, offering a platform that allows cryptocurrency holders to earn income from their idle crypto assets.
Passive investing is a strategy that involves putting money into assets, such as stocks or cryptocurrencies, and letting it appreciate over time. This approach can be appealing because it allows investors to generate a steady stream of income without engaging in frequent trading, which may involve additional risks. In the field of cryptocurrencies, passive investing can be conducted through various means, such as staking, yield farming, and lending.
Binance Earn is a great entry point for those looking to start with passive investing. It provides a range of products designed to cater to both newcomers and seasoned investors. Binance Earn includes options like flexible savings, which allow for instant deposits and withdrawals, and locked savings, which typically offer higher interest rates in exchange for locking up funds for a specified time period.
Getting started with Binance Earn is quick and simple. Users first need to log into their Binance account and navigate to the 'Earn' section. This interface presents the various savings products, such as Simple Earn, High Yield, and Auto-Invest, along with a summary of the holdings and returns based on the last 30 days.
Investors can browse through a list of available products, each containing the estimated Annual Percentage Rate (APR) and the duration of the investment (see image below). To start earning, users have to select a product and subscribe to it. They can decide on the investment amount and confirm the subscription. The Flexible options enable the withdrawal of funds at any time, while Fixed products require the investor to commit their funds for a certain period in order to receive the rewards. It’s worth noting that users are still able to withdraw their funds at any time, even when using the locked products. The difference is that users will give up any accrued rewards when withdrawing from locked products before the predefined date.
Learn more: .

Binance Web3 Wallet, an integral part of the Binance app, is a user-focused crypto wallet tailored for users interested in exploring decentralized finance (DeFi) and decentralized applications (DApps). It enables secure and efficient management of digital assets, supporting activities like yield farming and token swapping across various blockchain networks.
Binance Web3 Wallet utilizes Multi-Party Computation (MPC) to enhance security, mitigating the risks of the centralized storage of private keys. It creates three "key-shares" stored separately in the user’s device, cloud storage, and the Web3 Wallet. Each key-share is secured with a recovery password known only to the user.
Setting up the Binance Web3 Wallet is straightforward. Users can start by logging into their Binance account via the app, navigating to the 'Wallets' section, and selecting 'Web3' to create a new wallet. Before using the wallet, users are required to back it up and set a recovery password to secure their assets. The backup process involves connecting to a cloud storage service like iCloud or Google Drive and setting a backup password that Binance cannot access or reset.
Binance Web3 Wallet has many benefits. For instance, users can set it up directly through the Binance app without having to manage seed phrases or private keys. The wallet is also directly linked to Binance Bridge and other service providers, facilitating seamless token swaps across various blockchain networks and ensuring competitive rates.
The wallet’s design focuses on user security and autonomy. Important features include protection against incorrect address entries and alerts on potentially malicious smart contracts. In addition, MPC plays a crucial role in every transaction, minimizing the risks associated with single points of failure and enhancing asset security.
Learn more: What Is Binance Web3 Wallet?

Key Takeaways

In crypto, an airdrop is a common marketing strategy used by projects to distribute free tokens to users, typically as a way to increase awareness and encourage adoption.

Airdrop scams are fraudulent schemes in the crypto space that lure users with promises of free tokens or coins, aiming to steal their crypto holdings.

This article covers what airdrop scams are, how they usually operate, and how you can protect yourself and your assets from scammers.

Introduction

In recent years, airdrops have emerged as a widely used marketing strategy for cryptocurrency projects to distribute their tokens to potential users and investors. However, with the rise in airdrop popularity, there was also a significant increase in the number of airdrop scams. In this article, we will delve into what airdrop scams are, how they operate, how they look, and most importantly, how you can protect yourself and your crypto assets.

What Are Airdrop Scams?

Airdrop scams refer to fraudulent schemes designed to deceive cryptocurrency users by offering fake airdrops – supposed giveaways of tokens or coins. These scams exploit the allure of free tokens to trick beginners and unsuspecting individuals into connecting their crypto wallets to malicious websites, transferring assets to fraudsters, or disclosing sensitive information.

How Airdrop Scams Work

Most airdrop scams will involve some sort of phishing technique that lure users into malicious websites. Let’s go through some common methods.

Fake airdrop promotion

Scammers set up phishing websites mimicking legitimate airdrop and promote it through various channels, including social media, email, and messaging platforms. Their goal is to trick users into revealing their sensitive information or connecting their crypto wallets. 

In other words, they lure users by promising free tokens in exchange for participating in the airdrop. Once users express interest, scammers may request personal information, wallet addresses, or even private keys under the guise of claiming the airdrop. However, instead of receiving tokens, victims may find their wallets drained or compromised.

Impersonation

Scammers impersonate well-known cryptocurrency exchanges or influencers to gain credibility and lure victims into participating in fraudulent airdrops. Scammers may also hack into legitimate accounts to take advantage of their followers.

Unsolicited crypto or NFTs (non-fungible tokens)

Be careful if you find assets in your wallet that you never bought or asked for. Scammers may distribute unsolicited crypto or NFTs to users’ wallets in an attempt to promote malicious websites. Typically, users can find the scammer’s website when checking their wallets on a block explorer or as part of an NFT image that suddenly showed up in their wallets.

Note that victims may also lose funds when trying to sell or transfer tokens received from scammers. If you receive suspicious tokens, do not try to sell or interact with them.

Identifying Airdrop Scams

Here are some red flags to watch out for when evaluating potential airdrops:

1. Unrealistic promises: Beware of airdrops promising exorbitant rewards or returns without any effort or investment on your part.

2. Suspicious requests: Exercise caution if an airdrop requires you to connect your wallet to a website or to disclose sensitive information such as private keys, recovery phrases, or personal details.

3. Lack of transparency: Scrutinize airdrop projects lacking clear documentation, whitepapers, or reputable team members.

4. Phishing attempts: Stay vigilant against phishing tactics, including fake websites, emails, and social media accounts impersonating legitimate projects or influencers.

Examples of airdrop scams

In the example below, the victim receives an NFT that contains the scammer’s website embedded in the token name.

Below are examples of scam NFTs distributed to Solana users, inviting them to participate in fake airdrops. This happened right after the legitimate Jupiter airdrop.

How to Avoid Airdrop Scams

Use burner wallets

A burner wallet is a crypto wallet you create specifically for a single-use, making them suitable for riskier interactions. The idea is to only use it with a small amount of crypto, so you can limit your losses if something goes wrong.

Conduct thorough research

Before participating in any airdrop, conduct extensive research on the project, its team members, and its objectives. Verify the legitimacy of the airdrop by checking official sources, such as the project's website, social media channels, and reputable cryptocurrency forums.

Exercise caution with personal information

Never disclose your private keys, recovery phrases, or other sensitive information to unknown or untrusted parties. Legitimate airdrops do not require such information to participate. Be wary of any requests for personal data, as they may be phishing attempts by scammers.

Verify authenticity

Double-check the authenticity of airdrop announcements and promotions through official channels. Look for signs of legitimacy, such as official branding, clear communication channels, and endorsements from reputable sources within the cryptocurrency community.

Stay informed and alert

Stay informed about common airdrop scam tactics and remain vigilant against potential threats. Keep yourself informed of the latest developments in the cryptocurrency space and learn about the best practices for protecting your assets.

Reporting and Taking Action

Report suspicious activity

If you encounter a suspected airdrop scam or fraudulent activity, report it to the relevant authorities, such as cryptocurrency exchanges, regulatory bodies, or law enforcement agencies. By reporting scams promptly, you can help prevent further harm to yourself and others in the community.

Secure your assets

In the event of a suspected compromise or security breach:

Take immediate action to secure your assets.

Transfer your funds to a secure wallet or exchange with robust security measures in place.

Consider enabling additional security features, such as two-factor authentication (2FA), to protect your accounts from unauthorized access.

Conclusion

Airdrop scams pose a significant threat to cryptocurrency users, but with awareness, vigilance, and proactive measures, they can be effectively mitigated. By understanding the tactics used by scammers, identifying red flags, and adopting best practices for safeguarding your assets, you can navigate the cryptocurrency landscape with more confidence and peace of mind. Remember, the key to avoiding airdrop scams lies in staying informed, exercising caution, and trusting reputable sources.

Further Reading

5 Tips to Secure Your Cryptocurrency Holdings

What Is Phishing and How Does It Work?

Common Bitcoin Scams and How to Avoid Them

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.

🔥 Binance Highlights
Binance Academy partners with leading European educational institutions to offer university-accredited Web3 courses.Binance transfers all of SAFU’s assets to USDC.Binance FZE receives a VASP license from Dubai’s regulatory authorities.Binance completes the integrations of Tether (USDT) on the CELO network and DODO (DODO) on the Arbitrum One network.Binance adds ACA on Simple Earn Locked Products.

🗞️In The News
The Hong Kong Securities and Futures Commission (SFC) approves Bitcoin and Ethereum spot ETF applications.Solana developers release a new software update, which aims to address the Solana blockchain’s congestion problem.The UK government plans to introduce comprehensive legislation for the regulation of crypto assets by June or July.A jury finds the exploiter of the Mango Markets decentralized exchange guilty of fraud and market manipulation.Tether expands beyond its USDT stablecoin offering and launches four new business divisions: Tether Data, Tether Finance, Tether Power, and Tether Edu.

📖Binance Academy Knowledge
What Is a Bitcoin ETF?What Is Solana (SOL)?What Is a Decentralized Exchange (DEX)?What Are Appchains (Application-Specific Blockchains)?What Is the Binance Inscriptions Marketplace?

Binance Launchpool is a platform that allows crypto holders to earn new tokens by locking some of their existing assets, such as BNB and other supported tokens. This process is completely free, with users receiving new project tokens in exchange for locking some of their assets.
Participating in Binance Launchpool is straightforward. First, it is easy to earn tokens. A user locks some tokens with Binance and gets other tokens in return. New tokens are rewarded based on the amount of locked assets and the Launchpool period. This method simplifies the process of earning new tokens, making it accessible to a wider range of users. 
In addition, Binance Launchpool offers flexibility to its users. Participants can withdraw their rewards and unlock their funds at any time. Furthermore, Binance additionally supports projects featured on Launchpool by offering advisory services, enhancing community engagement, and extending marketing reach.
To participate, simply navigate to the Binance Launchpool page, and select a project you're interested in that is accepting contributions. Then, pick a pool to allocate your funds to. After locking your assets, you will start earning the project tokens.
The total rewards, farming period, supported tokens, and maximum hourly rewards can differ from project to project. When the farming period is over, your locked assets and all earned rewards will be automatically sent to your Binance Spot account.
Learn more: .

Binance Launchpad is a pioneering platform for Initial Exchange Offerings (IEOs), which has transformed crypto crowdfunding by providing a secure and efficient environment for crypto projects to raise capital.
Binance Launchpad ensures protection for users and projects by offering robust security measures during token sales. It supports growth by giving projects exposure to its millions of global users, ensuring substantial and the availability of multiple trading pairs after the launch.
In addition to facilitating token sales, Binance Launchpad provides support from Binance’s listing and investment teams. They carefully evaluate applications to ensure only the most promising projects are launched. As such, crypto projects can benefit from launching their tokens within a trusted platform, leveraging Binance’s reputation as the leading global exchange.
Token sales on Binance Launchpad operate on a subscription-based model. Participants need to commit a specific amount of BNB to the token sale. To participate in a token sale on Binance Launchpad as an early contributor, individuals must hold BNB in their Binance wallet and subscribe to the sale during the designated subscription period. 
Launchpad token sales are structured in a straightforward way. The sale process spans several days, beginning with the BNB Holding Calculation Period and ending with the Final Token Distribution. Additionally, the token sale pages provide access to essential resources such as the project's website, whitepaper, and research report. They also offer details on the sale rules and a frequently asked questions (FAQ) section to guide participants through the token sale.
Learn more: .

In the field of cryptocurrency, crowdfunding is a method of gathering the initial capital to begin the development of blockchain projects. Today, let’s take a look at various types of crypto crowdfunding and how they generally work.
One of the crowdfunding methods is the Initial Coin Offering (ICO). During an ICO, projects create tokens and offer them to early contributors. This process functions as a campaign, where investors acquire project tokens in exchange for funding the project.
Another type of crowdfunding is the Security Token Offering (STO), which involves issuing security tokens that represent ownership in an underlying asset, such as equity in a company or rights to a share of profits.
Initial Exchange Offerings (IEO) are token sales conducted through cryptocurrency exchanges. This provides projects with an existing user base and platform for fundraising and offers investors more assurance regarding the credibility of the project, as exchanges generally conduct due diligence.
The Initial DEX Offering (IDO) resembles the IEO but only targets traders within a particular decentralized exchange (DEX) for fundraising. This crowdfunding method is considered flexible as tokens are usually instantly listed on an exchange after the completion of an IDO. However, varying liquidity levels in DEXes may negatively impact the fundraising process compared to methods with more consistent liquidity.
An Initial Game Offering (IGO) is a method of crowdfunding utilized to raise funds for the initial development of blockchain games, often offering discounted in-game assets and tokens to early investors. IGOs are tailored to the gaming industry, enabling developers to directly obtain funding from their target audience. IGOs have contributed to an expansion within the blockchain gaming sector.
Learn more: What Is an Initial Exchange Offering (IEO)?

Key Takeaways

Puffer is a native liquid restaking protocol (nLRP) built on EigenLayer. 

It is designed to enhance the performance and diversity of Ethereum proof-of-stake (PoS) validators, making native restaking more accessible and decentralized.

Puffer’s slash protection mechanism and validator tickets ensure consistent rewards and increased security for stakers.

Introduction

Puffer's primary goal is to establish a new standard for secure validator operations while preserving Ethereum's decentralization. 

Puffer Finance introduced a new approach to Ethereum staking, making liquid restaking more accessible. It addresses the challenges of centralization and accessibility in staking through its permissionless framework, native restaking capabilities, and commitment to decentralization. Through robust slash protection mechanisms and validator tickets, the protocol can offer consistent rewards and increased security for ETH stakers.

But before discussing how Puffer works, it’s worth clarifying the differences between liquid staking and liquid restaking.

Liquid Staking vs. Liquid Restaking

Liquid staking refers to the process of tokenizing staked assets. For example, when you stake ETH on a platform like Lido, you receive stETH in return. Liquid staking tokens (LSTs) like stETH allow you to contribute to the network’s security without sacrificing liquidity. Then, you can use the LSTs elsewhere while your native ETH is staked.

Liquid restaking takes the concept further, enabling the use of staked ETH to expand blockchain security to other “external” modules and systems, such as oracles, sidechains, and rollups. This allows validators to better utilize their assets and supplement their staking rewards.

How Does Puffer Finance Work?

Puffer is designed to enhance the performance and diversity of Ethereum proof-of-stake (PoS) validators. Unlike traditional staking models that require validators to lock up a significant amount of capital (32 ETH) and maintain technical infrastructure, Puffer provides a more accessible alternative. With Puffer, individuals can participate as validators with as little as 1 ETH, lowering the barrier to entry and promoting decentralization.

Native liquid restaking protocol (nLRP)

Puffer is built on EigenLayer, which is a specialized blockchain layer optimized for staking operations. Puffer operates as a native liquid restaking protocol (nLRP):

Native means that Puffer only uses native ETH. 

Liquid refers to the liquid staking mechanism that gives users liquid staking tokens (LSTs). For every ETH you stake on Puffer, you get one pufETH, which you can use in other DeFi applications while your ETH is staked. 

Restaking refers to the liquid restaking mechanism that allows the ETH deposited on Puffer to be used as collateral for services on EigenLayer.

In other words, Puffer’s native liquid restaking mechanism allows validators to use their staked ETH in other activities while maintaining their validator status and generating yields. This enhances capital efficiency and ensures that validators' assets are fully utilized, contributing to a more robust staking ecosystem.

Permissionless framework

Puffer Finance adopts a permissionless framework, enabling anyone to run a validator on the protocol. This democratization of staking ensures that the validator set remains diverse and decentralized, mitigating the risk of centralization. By removing barriers to entry, Puffer can empower individual stakers to participate in Ethereum's consensus mechanism, aligning with the platform's ethos of decentralization.

Slash protection and MEV autonomy

Validators' assets are protected through Puffer’s innovative slash protection mechanism. By leveraging anti-slashing hardware support and robust security protocols, Puffer minimizes the likelihood of validators being slashed for malicious behavior or operational errors.

Additionally, Puffer gives validators autonomy over their MEV (Maximal Extractable Value) strategies, allowing them to optimize rewards while maintaining security and integrity.

Validator tickets and enhanced rewards

Puffer Finance introduces the concept of validator tickets, which guarantee rewards for stakers regardless of validator performance. This innovative approach ensures consistent rewards for stakers and incentivizes early participation in the protocol. Moreover, Puffer's integration with Eigenlayer supercharges rewards for validators, providing additional incentives for participation and contribution.

Puffer Airdrop

As of April 2024, there are no official announcements regarding a Puffer airdrop. However, users can earn Puffer Points by depositing stETH or providing liquidity to the Puffer platform. While we can’t be entirely sure, some users speculate that these points might be later used as part of an airdrop eligibility and distribution process.

Closing Thoughts

Puffer's mission is to establish a new standard for secure validator operations, focusing on maintaining Ethereum's decentralization. They achieve this by implementing anti-slashing technology to mitigate risks and by enabling a wider variety of validators, enhancing diversity in node operators.

The Puffer Finance protocol offers a decentralized, accessible, and innovative solution for Ethereum validators and stakers. By leveraging liquid staking, slash protection, and native liquid restaking capabilities, Puffer can make Ethereum's PoS ecosystem more efficient and accessible to everyone.

Further Reading

What Is Liquid Staking?

What Is EigenLayer?

What Is Maximal Extractable Value (MEV)?


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Fibonacci retracements are a fundamental TA tool often used to identify potential support and resistance levels. Derived from the Fibonacci sequence, a mathematical concept where each number is the sum of the two preceding numbers (e.g., 0, 1, 1, 2, 3, 5, 8, 13, etc.), Fibonacci retracements provide insights into potential price reversals or continuations.

 The primary Fibonacci ratios are 23.6%, 38.2%, 50%, 61.8%, 78.6%, and 100%. A Fibonacci retracement level is calculated by dividing the vertical distance between significant highs and lows by these key Fibonacci ratios. Traders often use these levels to anticipate areas where the price may experience a reversal in its current trend. For instance, during an uptrend, traders may look for the price to retrace to one of these levels before resuming its upward movement, potentially offering an opportunity to enter a long position. Conversely, during a downtrend, these levels may act as areas of resistance, providing potential opportunities to enter short positions. 
The 50% retracement level is particularly important as it is not only a Fibonacci ratio but also a psychological level where market participants may perceive value or indecision. Traders often pay close attention to price action around this level as it can provide significant insights into the momentum of the prevailing trend. 
One of the key principles behind Fibonacci retracements is the concept of the "Golden Ratio," which is approximately 61.8%. The 61.8% ratio is considered to have mathematical significance and often acts as a strong area of support or resistance.
Fibonacci retracements can be applied across various timeframes, from daily to monthly charts. The principles remain the same, but the significance of retracement levels may vary depending on the time period. 
Learn more: A Guide to Mastering Fibonacci Retracement.

The Ichimoku Cloud is a collection of TA indicators that help traders determine market momentum, trend direction, and S/R levels. It uses a combination of moving averages to compute a cloud that can help predict potential price fluctuations.
The Ichimoku Cloud consists of 5 lines:
1. The Tenkan-sen, or Conversion Line, is the fastest line in the Ichimoku Cloud. Calculated as the average of the highest high and the lowest low over the past 9 periods, it offers insights into short-term price momentum.
2. The Kijun-sen, or Base Line, represents the mid-term trend. It is calculated similarly to the Tenkan-sen but over 26 periods. A crossover between the Tenkan-sen and the Kijun-sen can signal potential shifts in market sentiment.
3. Senkou Span A, or Leading Span A, is the midpoint between the Tenkan-sen and the Kijun-sen, plotted 26 periods ahead. 
4. Senkou Span B, or Leading Span B, represents the average of the highest high and the lowest low over the past 52 periods, also plotted 26 periods into the future. The area between Senkou Span A and Senkou Span B forms the cloud, providing insights into potential future S/R levels.
5. The Chikou Span, or Lagging Span, is the closing price plotted 26 periods in the past. It can help traders gauge the current momentum and assess potential trend reversals.
The key part of the Ichimoku Cloud indicator is the cloud. It is formed as the area between Senkou Span A and Senkou Span B. When Senkou Span A is above Senkou Span B, the cloud indicates an uptrend and is colored in green. When Senkou Span A is below Senkou Span B, the cloud signals a downtrend and is colored in red (see image below).
Learn more: .