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This week we had a talk with our partner vEmpire, the first investment protocol with a staking platform for earning on metaverse tokens. The team told about its vision and future of DeFi, and explained current problems of DeFi adoption by traditional investors.



1) How, do you think, is DeFi transforming the world?



DeFi is replacing many of the current outdated processes and bringing in a decentralized and democratized financial ecosystem.



2) Do you think DeFi has changed investors’ skeptical perception of cryptocurrency?



For sure, it’s definitely a turning point for traditional investors who’ve only heard of BTC. Once they find out about the use cases for DeFI, they then fall down the crypto rabbit hole!



3) Will there be more investments in DeFI from traditional players?



We believe so, but the ignition that’ll fuel this is likely regulation.



4) What issues do traditional investors find the most challenging in DeFi?



People are always sceptical about new technology, especially if it seems too good to be true. People need to understand stablecoins, gas fees, leverage and more which takes time, and therefore they don’t invest and move on.



5) How can DeFi contribute to the global economy?



DeFI puts the community first, and aren’t controlled by governments or organisations. Which in turn will make DeFi more accessible for users around the world.



The team of vEmpire is quite optimistic about DeFi and its future, because they understand its real potential and advantages. Let’s thank vEmpire for this conversation!

AlphaGuilty

How to invest in DeFi

How much does crypto get taxed

How can NFTs be used in DeFi (decentralized finance)?

What is DeFi

How to calculate market cap crypto

How to find new crypto coins

Arbitrum

Optimism

LayerZero

Aptos

vEmpire: “DeFi makes investors fall down the crypto rabbit hole!”

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Potential_LayerZero_airdrop_—_How_to_be_eligible_and_get_free_crypto-1024x576.jpg" alt="" class="wp-image-1131" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Potential_LayerZero_airdrop_—_How_to_be_eligible_and_get_free_crypto-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Potential_LayerZero_airdrop_—_How_to_be_eligible_and_get_free_crypto-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Potential_LayerZero_airdrop_—_How_to_be_eligible_and_get_free_crypto-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Potential_LayerZero_airdrop_—_How_to_be_eligible_and_get_free_crypto.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



There is no doubt that the popularity of LayerZero will continue to grow. From the moment crypto appeared, it was clear that blockchain would be the most promising technology. Now, this is a reality and we are constantly facing new challenges and problems. Blockchain is not easy: it is the inevitable cost of a secure and functional system.



But how can LayerZero protocol help and why LayerZero Labs has made a breakthrough? Today we will talk about that and also discuss a possible LayerZero airdrop.



<h2>What is Layer 0 protocol (Layer Zero)?</h2>



So, LayerZero is a special application that allows you to send and receive transfers between blockchains using the ULN model. It uses an oracle and a relayer for processing. In other words, LayerZero is an interoperability protocol (omnichain). Now LayerZero enables the realization of cross-chain applications with a low-level communication primitive.



<h2>How does LayerZero protocol work?</h2>



LayerZero allows you to achieve cross-chain operational compatibility and functionality. LayerZero uses the Chainlink oracle, which has one of the clearest and most robust security policies. So, if someone decides to perform some questionable operations with LayerZero, they will encounter protections that cannot be easily bypassed. Moreover, LayerZero provides uniform liquidity across all chains with guaranteed finality at the source chain.



<h2>Who is the team behind LayerZero?</h2>



LayerZero Labs is a startup based in Vancouver. The LayerZero Labs was founded in 2021 by friends who worked together in computer network research labs.&nbsp;



Sequoia Capital and Andreessen Horowitz led a $135 million Series A+ investment in LayerZero Labs, with additional investors including Coinbase Ventures and Uniswap Labs. The LayerZero Labs previously raised $6 million in Series A funding from Binance Labs, and Sino Global Capital, among others.



But what about LayerZero&#8217;s potential airdrop and free crypto tokens? LayerZero does not currently have a crypto token, and there is no official airdrop date yet. But it is widely expected that $ZRO will be launched soon. We know for sure that the $ZRO crypto token exists because you can see it in LayerZero&#8217;s info code.How you can get a $ZRO crypto token from LayerZero? If you want to have a chance to win a retrodrop from LayerZero, just complete some tasks on AlphaQuest.

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Arbitrum_Airdrop_How_You_Can_Get_Free_Tokens_with_AlphaQuest_-1024x576.jpg" alt="" class="wp-image-1141" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Arbitrum_Airdrop_How_You_Can_Get_Free_Tokens_with_AlphaQuest_-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Arbitrum_Airdrop_How_You_Can_Get_Free_Tokens_with_AlphaQuest_-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Arbitrum_Airdrop_How_You_Can_Get_Free_Tokens_with_AlphaQuest_-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/Arbitrum_Airdrop_How_You_Can_Get_Free_Tokens_with_AlphaQuest_.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



Security, affordability, and ecosystem – everything is great in Ethereum except the gas charges. That&#8217;s why Layer 2 solutions are the best option for Ethereum right now. Of course, we are talking about Arbitrum.



What about an Arbitrum airdrop? Let&#8217;s start by telling you that you can participate in the Arbitrum airdrop and exchange the points you earn for crypto tokens and rewards.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="897" height="580" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-12.png" alt="" class="wp-image-1139" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-12.png 897w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-12-300x194.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-12-768x497.png 768w" sizes="(max-width: 897px) 100vw, 897px" /></figure>



<h2>What is Arbitrum?</h2>



So, Arbitrum is a Layer 2 solution for Ethereum. This means that Arbitrum is directly attached to Ethereum and they work in sync, which allows:



<ul>
<li>Remove complex calculations from the core network and take most of the transaction validation work from Ethereum&#8217;s validators.</li>



<li>Decrease the cost of recording a transaction in blockchain by using rollups – transaction packets.</li>



<li>Improve upscaling and increase network throughput without compromising blockchain security.</li>
</ul>



Thus, Arbitrum is an add-on to Ethereum, where users can conduct transactions with ETH or other tokens. To send tokens, you can use both the native Arbitrum bridge and third-party services.



<h2>Arbitrum: How Does It Work?</h2>



Arbitrum uses a new concept, allowing developers to easily run smart contracts and apps with low charges and increased throughput. Arbitrum&#8217;s creators have managed to optimize the rollup structure to send a minimal amount of data.&nbsp;



The AVM virtual machine in Arbitrum is responsible for transferring operations from L1 to L2 and back. Three types of validators were added to Arbitrum, as well as a unique dispute resolution mechanism that minimizes the total load on the core.



This introduces a validation step for deployment blocks, where other validators check that the block is correct and send a validation request if they think it is incorrect. If it turns out that the block is wrong or the check is unreasonable, the stake is confiscated, ensuring that validators always play fair or risk the consequences.



Also, the Arbitrum platform makes it possible to run contracts with minimal modifications. Top exchanges, bridges, wallets, and many platforms support Arbitrum. Now more than 200 projects in total are already running on Arbitrum, including exchanges and NFT marketplaces.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="870" height="580" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-13.png" alt="" class="wp-image-1140" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-13.png 870w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-13-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-13-768x512.png 768w" sizes="(max-width: 870px) 100vw, 870px" /></figure>



<h2>How to Get Potential Arbitrum Token Airdrop?</h2>



Want to participate in Arbitrum airdrop and exchange points for tokens? Arbitrum does not have a crypto token at the moment, but such a token will probably appear in the future. You can complete the tasks with AlphaQuest to have a chance to win a retrodrop and participate in a token airdrop from Arbitrum. Arbitrum airdrop is your chance to receive free tokens.



Right now there are a lot of suggestions about Arbitrum doing an airdrop and giving away tokens. Users who complete Arbitrum tasks are eligible to receive tokens in Arbitrum airdrop. Wan to join Arbitrum token airdrop? There&#8217;s no announced date for the Arbitrum token airdrop right now, but you&#8217;ll have a better chance of reaping the benefits when you complete these tasks.

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="576" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-1024x576.jpg" alt="" class="wp-image-1169" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-1024x576.jpg 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-300x169.jpg 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax-768x432.jpg 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/All-you-need-to-know-about-crypto-tax.jpg 1200w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



In 2023, many countries around the world have made significant strides in crypto regulation and have changed crypto taxes. But what&#8217;s the reason? Today, not only crypto investors, but other people are increasingly interested in digital assets, making the need for legal certainty for crypto in some countries urgent. In addition, the number of crypto transactions is on the rise day by day.



Right now, we&#8217;re going to summarize all the information about crypto taxes so you can get up to speed on this topic. This is very important because many people want to make money buying/selling digital assets, and crypto transactions can be made for large amounts.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="682" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-1024x682.png" alt="" class="wp-image-1170" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-1024x682.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-768x512.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22-1536x1023.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-22.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



<h2>How is crypto taxed?</h2>



Now crypto taxes are levied on various operations conducted by businesses and individuals using digital assets. This leads to extensive discussions on more specific issues such as the need for licensing of crypto exchanges, crypto taxes, and other important topics. The situation is constantly evolving. Here are some general guidelines on how crypto is taxed:



<ul>
<li>Capital gains taxes. When you sell/exchange coins for fiat currency (e.g. USD, EUR), you may be subject to capital gains taxes. The gain/loss is calculated by subtracting the cost basis (the original purchase cost) from the sale cost. The crypto tax rate depends on how long you held the asset before selling it (short-term or long-term capital gains).</li>



<li>Mining. If you receive digital currency through mining, the value of your crypto at the time of receipt is considered income for crypto tax purposes. You may also be able to deduct expenses related to mining, such as electricity and hardware costs.</li>



<li>Crypto trade. When you trade one coin for another, it is generally considered a taxable event. The gain or loss from crypto trade operations is calculated based on the fair market value of the coins at the time of the exchange.</li>



<li>Spending coins. This means that you may be required to report the crypto transactions on your tax return and pay any applicable crypto taxes based on the fair market value of the assets at the time of the deal.</li>



<li>Airdrops. Receiving an airdrop from a project as part of a marketing campaign or promotional giveaway is considered taxable income. For crypto investors, it is important to report the amount received on a tax return.</li>
</ul>



So, It&#8217;s important to note that the crypto tax treatment may vary by jurisdiction. Therefore, it&#8217;s important to consult with a professional in this field or a financial advisor to understand the implications of crypto transactions in your country.



<h2>Do you have to pay crypto taxes?</h2>



So, coins/tokens are considered digital assets in the United States, and the IRS generally treats them similarly to stocks or bonds. Any gains from crypto transactions are subject to taxation, either as income or capital gains tax. Also, crypto taxes depend on factors such as how the cryptocurrency was acquired and how long it was held.



To determine if you have a crypto tax liability related to your digital asset, it&#8217;s important to analyze how you used it. Taxable events refer to transactions that are subject to taxation, while non-taxable ones have no crypto tax implications. Let&#8217;s look at cases where crypto investors have no obligations to the IRS:



<ul>
<li>Receiving coins as a gift is usually considered a non-taxable event, and you don&#8217;t have to pay crypto tax on the gift until you sell it.</li>



<li>If you donate digital currency directly to a qualified tax-exempt charity or nonprofit organization, you may be able to claim a charitable deduction on your tax return.</li>



<li>Transferring cryptocurrency between wallets or accounts that you own is not taxable. You can retain your original cost basis and purchase date to monitor potential crypto tax consequences if you decide to sell assets in the future.</li>



<li>When you stake ETH and possess ETH2 that generates staking rewards, those earnings are usually not taxable since they have not been released by the protocol.</li>
</ul>



Simply buying tokens on a crypto exchange and holding them is not a taxable event. In other words, crypto tax is usually triggered later when you sell it and realize the gain or loss.



<h2>How much crypto tax do I pay?</h2>



For example, in the United States, crypto is treated as property, which means that any gains or losses from crypto trade are subject to capital gains tax. It should also be clarified that the capital gains tax rate depends on the taxpayer&#8217;s income level and the holding period of the currency.



If the coins are held for less than one year, it is considered a short-term capital gain and the crypto tax is the same as the ordinary income crypto tax rate, which ranges from 10% to 37%. However, if the crypto is held for more than one year, it is considered a long-term crypto capital gain and the crypto tax rate ranges from 0% to 20%, depending on the taxpayer&#8217;s income level.



How can you simplify the crypto tax calculation process? A crypto tax calculator is a tool that helps calculate crypto tax liability related to crypto transactions.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="682" src="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-1024x682.png" alt="" class="wp-image-1171" srcset="https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-1024x682.png 1024w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-300x200.png 300w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-768x512.png 768w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23-1536x1023.png 1536w, https://api-blog.alphaguilty.io/wp-content/uploads/2023/03/image-23.png 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



<h3>How to report your crypto on tax return</h3>



When you buy/sell coins, you are required to report any gains/losses to the IRS. Many exchanges provide reports about crypto transactions that include all activity in your account, making it easy to gather the necessary info for tax returns. However, if you have crypto transactions across multiple exchanges or wallets, the experience may be more complex.



So, to prepare your tax return, you will need to gather records of all your operations with digital currency. To simplify this process, you can use specialized tax software such as CoinTracker or TokenTax. This tax software allows you to input activity across all exchanges you use and generate a cost-basis report. However, it&#8217;s important to note that tax software may charge a fee for its service.



In the case of digital currency, the tax year for reporting is the same as for other investments. A tax year is a 12-month period for which taxes are calculated and paid. It&#8217;s important to understand the tax year in a particular jurisdiction and to file tax returns on time to avoid penalties or fines.



<h2>Conclusion about crypto taxes</h2>



If you carelessly or intentionally ignore crypto tax rules or regulations, you may owe a penalty. If you don&#8217;t pay the penalty on time, you&#8217;ll be charged interest. But what if you&#8217;re preparing your crypto taxes and realize you don&#8217;t have the money to pay? For example, you can apply for a repayment plan from the IRS (you&#8217;ll still owe, but you&#8217;ll avoid penalties for underreporting income).

vEmpire: “DeFi makes investors fall down the crypto rabbit hole!”

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