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Used across all markets, the spread is the difference between the buy (offer) and sell (bid) prices of an asset. Spreads provide an additional opportunity to traders to make money through buying and selling assets.

The spread of an asset will depend on the current demand or an asset and the market’s volatility and is presented in either a percentage or value form. Assets with markets displaying higher levels of demand will typically have smaller spreads and usually higher price points. 

As an example, when you look at an order book for Bitcoin you will usually see prices reflected in green and red reflecting the offer prices and bid prices. The spread will then be indicated above the most recent trades. As another example, consider foreign exchange counters where the buy and sell prices are different, this difference is known as the spread. Market makers use spreads to generate money from transactions completed at market prices.

Let's put this in context: George buys 100 shares for a £2 ask price in “ABC” a publicly listed company. George pays £200 in return for 100 shares. If he decides to sell the shares back at the same price he bought them for, he would sell the 100 shares for the bid price at £1.95 and would receive £1.95 each instead of £2. This would mean he gets a return of £195 and loses £5, which would be paid to the market maker.

Sitting among the 30 biggest cryptocurrencies by market cap, Stellar is focused on bridging the gap between the business of blockchain and the traditional financial institutions. The platform provides a means for users to send assets and money through the blockchain, utilising a decentralised network of authenticators.

Redefining the financial landscape, Steller presents a digital transformation on the traditional services users have become accustomed to. Merging innovation with a practical application, the network is able to help users around the world, as well as financial industries, achieve a more streamlined service. Let's explore what Stellar is.

What is Stellar (XLM)?

Before we dive into the "what", let's first stipulate that one stellar is known as a lumen and uses the ticker XLM. Stellar launched in July 2014 and soon afterwards changed its strategy to be more focused on integrating blockchain technology into financial institutions. 

The concept behind Stellar is to provide a space in which users can transfer everything from traditional crypto and fiat currencies to tokens representing new and existing assets, increasing their transaction performance by using lumens.

Similar to the Ripple XRP network, Stellar is designed to cater to both payment providers and financial institutions, building a bridge between the blockchain and traditional financial sector. Developing on the Ripple concept, Stellar has also positioned itself as an exchange as its ledger has an inbuilt order book that keeps track of all the assets on the network. 

Who Created Stellar?

The founders of Stellar are Jed McCaleb and Joyce Kim, both previously employees at Ripple. McCaleb, who founded and was acting CTO of Ripple, and lawyer Joyce Kim, decided to create Stellar after they left the Ripple team in 2013 following a disagreement on the direction that Ripple was taking. McCaleb is also credited with creating the first successful Bitcoin exchange, Mt Gox. 

McCaleb described Stellar's aim as giving people a means of moving their fiat into crypto and more seamlessly conducting international payments. The network provides cross border transactions with low transaction fees and fast executions. With leading technology and innovative problem solving, the network has made a healthy impression on both institutions and investors alike.

How Does Stellar Work?

Stellar is a hard fork off of the Ripple network with several similarities in design and functionality, however, the platform set itself apart by building in several key features. The platform is secured through the Stellar Consensus Protocol which revolves around these core business concepts: decentralised control, flexible trust, low latency, and asymptotic security.

The biggest upgrade launch came in 2015 when the platform replaced its consensus mechanism with a concept called federated Byzantine agreement. This required nodes to vote on transactions until quorums are reached. Anyone is able to join the consensus, and there are measures in place to inhibit bad actors operating with ill intent on the network.

The software behind the platform is called Stellar Core and can be altered to adhere to the needs of the operation using it. The nodes making up the network can be created to function as either Watchers, Archivers, Basic Validators or Full Validators. For example, watchers can only submit transactions while Full Validators can vote on which transactions are valid and maintain a ledger of all node activity.

Another element to the network is the Stellar Anchors. These gateways are responsible for accepting deposits of currencies and assets and issuing depictions of these on Stellar.

What Is XLM?

Known as lumens, XLM is the native cryptocurrency to the Stellar platform. XLM acts as an intermediary currency for transactions taking place on the network. With cost-effective experience priorities, every transaction on the Stellar network costs 0.00001 XLM, a fraction of a dollar (at the time of writing). 

When the platform launched in 2014, 100 billion lumens were minted, programmed to increase by 1% annually until the total supply reached 105 billion. Five years later the Stellar uses voted to end this process. 

That same year, in 2019, the Stellar Development Foundation (a non-profit organisation) reduced its share of XLM in order to regulate the Stellar economy. This brought the total supply down to 50 billion. At the time of writing, roughly 49% of this total supply is in circulation. 

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Solana is a high-performance blockchain that uses a unique consensus mechanism to achieve high throughput and security. Thanks to its user-friendly nature, the platform is already being used by major companies. As we explore what Solana (SOL) is, we take a look at the project's intentions, successes, and of course why it is often referred to as the leading "Ethereum killer".

Since Bitcoin was created in 2009 an entire crypto ecosystem has emerged, valued at almost $1.2 trillion at the time of writing. While Bitcoin was designed to provide a global payment system to address problems in the traditional financial sector, other platforms like Ethereum and now Solana have been created to facilitate the development of the blockchain industry as a whole through programmable functionalities.

What is Solana (SOL)? 

Recognised as being one of the fastest-growing protocols in the DeFi space, Solana offers a platform for developers to build decentralized applications (dapps) and smart contracts, similar to Ethereum. However, what sets Solana apart is its remarkable speed and lower transaction fees.

The project is led by two main entities: the Solana Foundation, a non-profit organization based in Switzerland, focuses on promoting the platform and collaborating with international partners; and Solana Labs, located in San Francisco, takes charge of driving the project's development.

Solana implements a unique approach to support a more environmentally friendly crypto ecosystem. While it utilizes a Proof-of-Stake consensus mechanism to maintain its operations on the platform it also utilises an innovative consensus mechanism called Proof-of-History (PoH), created by one of its founders. 

PoH is groundbreaking in the blockchain space, allowing the network to process an impressive 65,000 transactions per second. For context, Ethereum can process 30 transactions a second. PoH is described as being a "timekeeping technique to encode the passage of time within the data structure." 

Renowned for being one of the fastest programmable blockchains in the cryptocurrency world, Solana has built a dedicated following. This is evident from the wide range of businesses, from finance to travel, using the platform and the strong interest in SOL tokens, the platform’s native coin. 

Key features of Solana

Setting itself apart in the industry and making it a hit among the investor community, Solana offers these key features:

Scalability

The platform is able to handle thousands of transactions per second (TPS), using advanced technologies like parallel processing and mempool-based TPUs for scalability.

Smart contracts

Solana supports smart contracts, allowing developers to create and operate decentralized apps.

Proof of Stake (PoS) consensus

It's unique PoS consensus combines Proof of History (PoH) for speedy transactions, quick validation, and swift block confirmations.

Decentralized finance (DeFi)

Solana's fast, low-cost transactions make it a DeFi favourite, facilitating lending, trading, yield farming, and more.

Who created Solana?

Software engineer, Anatoly Yakovenko, is responsible for creating the Solana platform. He started working on the blockchain project in 2017, three years prior to its launch, alongside his former colleagues, Greg Fitzgerald and Eric Williams. They teamed up with several other former colleagues and together built the programmable network we know today.

Anatoly Yakovenko is also credited with developing the PoH protocol, an innovative contribution to the blockchain space that allows for greater scalability, thereby boosting usability. His expertise has been influential in the industry.

How does Solana differ from Ethereum?

One of the platform's main aims is to improve on several of the Ethereum platform's computing functionalities. Solana stands out by making transactions really fast, while also improving how much the system can handle, scalability, and cost structure. This makes Solana a top choice for efficiency and performance in the world of blockchain.

Scalability

While the project's leads say that Solana will process up to 700,000 transactions per second (TPS) as the network grows, it can currently handle around 65,000 TPS, still a far cry from Ethereum's 30 TPS.

Solana is one of the few layer-one solutions from a computing platform that is able to support thousands of transactions per second without the use of off-chains or second layers.

Cost

Due to the nature of the Solana network, it is able to provide much more cost-effective transactions, generally costing around $0.000125 per transaction. 75% less than that of Ethereum, $0.0005 per transaction at the time of writing.

What is SOL?

SOL is the native cryptocurrency to the Solana platform powering its scalability and reduced cost structure. The cryptocurrency acts as a utility token, used to pay for transactions on the network and to secure the network through staking. 

SOL is a proof-of-stake cryptocurrency, which means that it is secured by network participants who stake their SOL tokens. The price of SOL is impacted by conventional factors like project updates, investment market sentiment, exchange activity, and the overall economy, alongside variables such as the token's inflation rate, burning amount, and the expansion of the Solana ecosystem.

How Can I Buy SOL?

If you're looking to diversify your crypto portfolio with the likes of Solana, you’ve come to the right place. Tap allows users to seamlessly buy, sell, trade, and store SOL through the convenience of the Tap app. Using crypto or fiat money, users can tap into this growing market and become part of the Solana-driven blockchain revolution. For more content on how to trade Solana, see here on the Tap website.

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Risk in trading is the chance that something might negatively impact an investment. Before engaging in any trading activities it is important to evaluate your appetite for risk, determining whether you are able to handle more risk or are more risk averse. 

Measuring risk will be dependent on the type of asset you are investing in, the amount of capital you have to use, and the time frames in which you expect to see results. Different assets and trading strategies hold different amounts of risk. 

For example, investing in an index fund is considered a low-risk investment and is better advised to investors looking to make a slow and steady return over a longer period of time. Index funds aggregate the performance of the 100 companies listed on a particular stock exchange and pay back dividends accordingly. Because they are large companies the growth is often more likely to be smaller yet consistent. 

With a little more appetite for risk, in the crypto markets, the same could be said about choosing to invest in an emerging altcoin versus established cryptocurrencies like Bitcoin or Ethereum. An emerging asset would encompass a higher risk higher reward ratio, however, no returns are guaranteed. 

You can speak to a financial advisor to get a sense of your risk appetite.

‍‍Slippage plays an important role in trading cryptocurrencies for retail investors as it determines the difference between the amount that you expected to pay in a transaction and the amount the trade was executed at. Below we're uncovering what slippage in crypto is, explaining how it can contribute to risk, and providing some practical examples on how to avoid it. 

What Is Slippage In Trading?

Slippage is when an investor opens a trade but between creating the trade and the trade executing, the price changes due to price movements in the greater market. This can often be a costly problem in the financial sector and particularly when trading digital currencies on crypto exchanges.

How Does Slippage Occur?

The two main causes of slippage are volatility and liquidity, outlined in more information below.

Volatility is when the price changes rapidly, as is common in cryptocurrency markets, and as a result the price changes between the time of creating the buy or sell order and the time of execution. 

Liquidity concerns on the other hand are when the coin you are trading is not traded very often and the range between the lowest ask and the highest bid is wide. This can cause sudden and dramatic price changes, resulting in slippage. Fewer people trading an asset results in fewer asking prices, resulting in less favourable prices. 

This is common among altcoins with low volume and liquidity. While slippage can occur in forex and stock markets too, it is much more prevalent in crypto markets, particularly on decentralised exchanges (DEXs). 

There are two types of slippages:

Positive Slippage

Positive slippage is when a trader creates a buy order and the executed price is lower than the price initially expected. This will result in the trader getting a better rate. The same is true for a sell order that experiences a higher price point at trade execution, resulting in more favourable value for the trader. Positive slippage banks profits.

Negative Slippage

Negative slippage is when the trader loses out on the trade, with the price of the buy order higher than expected at the time of execution. The opposite is true for sell orders, meaning that the execution price is lower at the time of execution, similarly resulting in losses for the trader. 

Can Slippage Be Avoided? How To Avoid Slippage

While one can't eradicate slippage entirely, there are several measures one can take to better manage slippage, as regularly falling victim to negative slippages can result in losing a lot of money. 

• Create limit orders

Instead of creating market orders, traders can instead create limit orders as these types of trades don't settle for unfavourable prices. Market orders are designed to execute a trade service as quickly as possible at the current available price.

• Set a slippage percentage

Traders can create a slippage percentage that eliminates trades happening outside of the predetermined range. This can range from 0.1% to 5%, however, if the slippage percentage is too low this could lead to the trade not being executed and the trader missing out on large drops/jumps.

• Understand the coin's volatility

When in doubt, get educated. Learn about the coin's volatility as well as the volatility on the trading platform you are using. Understanding more about previous patterns can assist in making more informed decisions on when to open and close a position, and avoiding negative slippages.

How To Calculate Slippage

Slippage can be calculated in two ways, either in dollar amount or percentage. Although to work out the percentage, you will first need the dollar amount. This is calculated by subtracting the price you expected to pay from the price you actually paid. This amount will indicate if you incurred a positive or negative slippage. 

Most exchanges express this amount in percentages. This is calculated by dividing the dollar amount of slippage by the difference between the price you expected to get and the limit price. Then multiply that by 100. 

For example, say you are looking to buy Bitcoin for $50,000, but are not willing to pay more than $50,500. When the price is at $50,000 you will create a limit order of $50,500, however, the order executes when the price reaches $50,250. This will result in a $250 slippage. 

To calculate the percentage, divide $250 by $500 (the difference between the price you expected to pay and the limit order). 0.5 multiplied by 100 equals 50%. 

In this case, your slippage was $250 or 50%. 

Want to know more about cryptocurrencies and trading? Check out all our other educational articles here. 

An unpredictable trend emerged in 2021 where dog-themed cryptocurrencies made a barking appearance, with Shiba Inu gaining much of the spotlight (and the value). Originally labelled a meme token, the network had much more in store for its increasingly growing following on the internet. As we explore what Shiba Inu is and how it originated, you can learn the ropes about one of the digital money coins with the biggest gains in market cap 2021.

When it came to crypto investing in 2021 the community was largely behind meme tokens. Heavily influenced by the likes of Elon Musk, Dogecoin and other spin-off cryptocurrencies saw an impressive increase in market value. As the main rival to Dogecoin, Shiba Inu is worth knowing about.

What is the Shiba inu coin?

Stemming from the logo of Dogecoin based off of a Shiba Inu dog from a meme, Shiba Inu was designed with the same dog in mind. The decentralized network was originally created in 2020 as an alternative to Dogecoin, but based on the Ethereum network.

The coin behind the network, SHIB, is based on an ERC-20 token standard and is only a small offering of the Shiba Inu network. There is also an exchange called ShibaSwap, where users can trade SHIB and other cryptocurrencies. Utilizing many dog references, the project's "woofpaper" (whitepaper) explains that users can also "bury" the tokens in smart contracts to earn interest, "dig" in the Puppy Pools to provide liquidity and utilize the networks other two tokens, Doge Killer (LEASH) and Bone ShibaSwap (BONE).

There is also an NFT game called Shiboshi Game and an NFT art incubator called Shiba Artist Incubator.

Why has Shiba inu been so popular?

After launching in 2020 the coin was dubbed the "Dogecoin killer" and gained mass interest on social media platforms (as well as the mainstream news). In early 2021, Coinbase added the coin to its list of supported cryptocurrencies prompting investors to send the price soaring over 40% in just two days. 2021 saw unbelievable gains for SHIB, including its ranking in the top 10 biggest cryptocurrencies by market cap.

Following a string of media announcements concerning Dogecoin (largely by Tesla founder Elon Musk), the platform leveraged on its mentions and in November 2021 recorded gains of over 60,000,000% since January of that same year. While Musk has mentioned SHIB on Twitter he has admitted to not actually owning any.

Who created Shiba inu?

Shiba Inu was created by an anonymous entity going by the name of Ryoshi, much like Satoshi Nakamoto behind the creation of Bitcoin. The network has an interesting story behind its total supply, with 1 quadrillion tokens minted at launch. It currently has a circulating supply of 549 trillion SHIB coins.

Ryoshi decided to lock 50% of the total supply in Uniswap for liquidity purposes and sent the remaining 500 trillion SHIB to Ethereum founder Vitalik Buterin. Buterin went on to burn 90% of his share and donated the remaining 10% to a Covid relief fund in India. This burning event saw an increase in market price, and of course, gained much media and website attention within the crypto community.

How does Shiba inu work?

The ShibSwap platform itself operates as a decentralized exchange, with earning capabilities via interest-bearing smart contracts. SHIB can be traded much like any other cryptocurrency and can be stored in any wallet that supports ERC-20 tokens.

The LEASH token was originally designed as a stablecoin linked to the Dogecoin price but was later changed to an ERC-20 token that allows users to stake their tokens in the liquidity pool and earn xLEASH as rewards.

The BONE token on the other hand is a governance token that is designed to provide users with voting rights on upcoming proposals on Doggy DAO.

The platform also launched 10,000 "Shiboshi" NFTs on the Ethereum blockchain in October 2021, made available for trade.

While it is often referred to as a rival to Dogecoin, the network presents many more use cases than simply a digital money system.

What is SHIB?

SHIB is the native cryptocurrency to the Shiba Inu platform. Currently (at the time of writing) holding a position in the top 20 biggest cryptocurrencies based on market cap, Shiba Inu has seen impressive results in the two years it has been on the market.

Where can I get Shiba inu?

To get your hands on SHIB you can simply buy the cryptocurrency through your Tap app. Using a range of cryptocurrencies and fiat currencies on offer, users can simply execute the trade and store of the SHIB in the unique wallet linked directly to your account.