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Beginner's Guide<\/a>, MEXC Creators<\/a>","space":"Beginner's Guide<\/a> MEXC Creators<\/a>"},"taxonomies":{"post_tag":"","language":"English<\/a>","post_translations":""},"readTime":{"min":3,"sec":40},"status":"publish"},{"id":28788,"link":"https:\/\/blog.mexc.com\/layerzero-omnichain-protocol-for-blockchain-cross-chain-communication-creator-dhemas\/","name":"layerzero-omnichain-protocol-for-blockchain-cross-chain-communication-creator-dhemas","thumbnail":{"url":"https:\/\/blog.mexc.com\/wp-content\/uploads\/2024\/03\/image-61.png","alt":""},"title":"LayerZero: Omnichain Protocol for Blockchain Cross-Chain Communication","excerpt":"LayerZero is an innovative protocol that enables cross-chain transactions with various revolutionary features.","content":"What is LayerZero Protocol?\n\n\n\nAs we know, the primary challenge faced by the blockchain industry is the inability to transfer assets and data across different blockchain networks. However, with the Layerzero Protocol, this issue can now be addressed.\n\n\n\nLayer 0 is an innovative protocol that enables cross-chain transactions. It facilitates cross-chain transactions and introduces various revolutionary features, such as Omnichain Fungible Tokens (OFT) and Omnichain Non-Fungible Tokens (ONFT).\n\n\n\nInteroperability Challenge\n\n\n\nBlockchain technology has transformed the way how we store, transfer, and process data. However, a drawback lies in its lack of interoperability between different blockchain networks.\n\n\n\nMany blockchain networks function in isolation, requiring every user to switch networks if their assets or data aren't compatible with a particular network. This constraint hinders the seamless transfer of funds and data across diverse systems.\n\n\n\nOmnichain LayerZero introduces a groundbreaking interoperability protocol, facilitating direct cross-chain communication independent of a specific entity or platform. This innovation paves the way for more streamlined and efficient processes.\n\n\n\nUnderstanding the LayerZero Protocol\n\n\n\nLayerZero protocol functions as the pioneering communication protocol in the blockchain industry, facilitating direct transactions between various networks. This approach introduces a novel method for cross-chain interaction without necessitating third-party intermediaries.\n\n\n\nThe Layer 0 Omnichain protocol simplifies cross-chain transactions through a lightweight on-chain approach called Endpoint. Supported by each network chain, it establishes a fully connected ecosystem where each node is directly connected.\n\n\n\nThe protocol's mechanism opens up possibilities for large-scale decentralized applications (dApps), allowing every user to access decentralized exchanges (DEX) and cross-chain lending. This means a single application can be efficiently utilized across various chains.\n\n\n\nLayerZero serves as a universal translator for different blockchains, facilitating asset exchanges and application usage across networks.\n\n\n\nLayerZero Mechanism\n\n\n\nThe layer-0 concept differs from previous bridge technologies like Wormhole. Instead of wrapping systems or relocating assets, the protocol directly transmits original assets using oracles and modules for applications on different networks.\n\n\n\nRelayer\n\n\n\nThe relayer is an independent component sending proof and transaction data from chain A to B, also matching the block header hash from chain A to B.\u00a0\n\n\n\nThe mechanism ensures data synchronization between block header and transaction proof on chains A and B. \n\n\n\nLayerZero Protocol Mechanism - LayerZero Whitepaper\n\n\n\nAs demonstrated above, the LayerZero protocol empowers blockchain networks to streamline their processes, allowing users to utilize their relayer or avail of services offered by networks and applications.\n\n\n\nOracle\n\n\n\nAnother crucial component is the Oracle, which notifies the destination chain when block requirements are met. For example, in Ethereum, there are 15 block confirmations to ensure transaction stability.\n\n\n\nWith the LayerZero protocol, the process will be executed instantly and more efficiently, ensuring a smooth transaction on every network.\n\n\n\nEndpoints\n\n\n\nEndpoints are vital components of any blockchain integrated with Layer 0, comprising Communicator, Validator, Network, and Libraries modules. \n\n\n\nLayerZero ensures a more easy process where adding a new network only requires creating new code to the library, while other components (communicator, validator, and network) remain unchanged.\n\n\n\nLayerZero Digital Assets\n\n\n\nLayer 0 not only facilitates communication between blockchains but also includes Omnichain Fungible Token (OFT) and Omnichain Non-Fungible Token (ONFT).\n\n\n\nOmnichain Fungible Token (OFT)\n\n\n\nOmnichain Fungible Token is a standard for assets exchanged through LayerZero. It has V1 for EVM-based blockchains and V2 for non-EVM networks.\n\n\n\nOmnichain Non-Fungible Token (ONFT)\n\n\n\nOmnichain Non-Fungible Token is a crucial component serving as the NFT token for the Layer 0 protocol, with two available versions: ONFT721 and ONFT1155.\n\n\n\nClosing Thoughts\n\n\n\nLayerZero offers a vital solution in the blockchain industry, providing the first interoperability protocol connecting diverse blockchain networks. \n\n\n\nTransaction processes on each network become simpler, eliminating complexity and significant costs.\n\n\n\nThis protocol also introduces innovative features such as Omnichain Fungible Token (OFT) and Omnichain Non-Fungible Token (ONFT). \n\n\n\nDespite some acknowledged shortcomings, with ongoing development and updates, Layer 0 is expected to enhance its performance and overcome its challenges over time.\n\n\n\nPersonal Note From MEXC Team\n\n\n\nCheck out our MEXC\u00a0trading page\u00a0and find out what we have to offer! There are also a ton of\u00a0interesting articles\u00a0to get you up to speed with the crypto world. Lastly, join our MEXC Creators project and share your opinion about everything crypto! Happy trading! Learn about interoperability now!","author":{"name":"Dhemas Putra","link":"https:\/\/blog.mexc.com\/author\/dhemas-putra\/"},"date":"Mar 28, 2024","dateGMT":"2024-03-28 07:53:57","modifiedDate":"2024-03-28 07:53:58","modifiedDateGMT":"2024-03-28 07:53:58","commentCount":"0","commentStatus":"closed","categories":{"coma":"Beginner's Guide<\/a>, MEXC Creators<\/a>","space":"Beginner's Guide<\/a> MEXC Creators<\/a>"},"taxonomies":{"post_tag":"","language":"English<\/a>","post_translations":""},"readTime":{"min":3,"sec":27},"status":"publish"},{"id":28783,"link":"https:\/\/blog.mexc.com\/how-to-use-diamond-pattern-for-crypto-trading-a-simplified-guide-creator-dhemas\/","name":"how-to-use-diamond-pattern-for-crypto-trading-a-simplified-guide-creator-dhemas","thumbnail":{"url":"https:\/\/blog.mexc.com\/wp-content\/uploads\/2024\/03\/image-59.png","alt":""},"title":"How To Use Diamond Pattern For Crypto Trading: A Simplified Guide","excerpt":"Understanding patterns is crucial for profits and risk management. One of the most common patterns used in the crypto market is the diamond pattern.","content":"Diamond Pattern For Crypto Trading - Image by Freepik\n\n\n\nUnderstanding various strategies and patterns is crucial for achieving profits and managing risks better in crypto trading. One of the most common patterns used in the crypto market is the diamond pattern.\n\n\n\nThe diamond pattern is an effective trading pattern for interpreting market movements. Diamond charts have the potential to assist traders in designing optimal crypto trading strategies.\n\n\n\nNow the question is, how effective is this pattern, and how can you use the diamond pattern in crypto trading? Find the answer in this article!\n\n\n\nWhat is the Diamond Pattern?\n\n\n\nThe diamond pattern is a sign that typically appears near the peak of market price movements. The term \"diamond\" itself comes from its shape, resembling a diamond formed by trend lines connecting the highest and lowest prices.\n\n\n\nDiamond pattern formation involves identifying heads and shoulders that are not in the center of the chart, usually followed by drawing trend lines based on the peaks and valleys formed.\n\n\n\nThe diamond chart itself is a rare pattern, but when it occurs, it can be a strong indication that an ongoing upward trend may be coming to an end.\n\n\n\nThis pattern can be observed when prices, previously in an upward trend, start moving sideways for a certain period, forming a diamond-like pattern. Once the pattern is formed, it becomes an indicator of a potential trend reversal.\n\n\n\nDiamond Chart Patterns Types\n\n\n\nDiamond charts are robust patterns and can be used to interpret both bearish and bullish conditions;\n\n\n\nBullish Diamond\n\n\n\nThe Bullish Diamond pattern is a pattern that depicts a scenario opposite to the previous pattern. This diamond chart type usually appears during a strong downtrend in the market.\n\n\n\nA bullish chart is characterized by a downtrend followed by a stability period forming peaks and valleys at the base of the pattern.\n\n\n\nTo confirm a bullish diamond pattern, four trend lines are drawn around its structure. If these lines are almost equal in length and form a diamond, the structure can be recognized as a bullish trend.\n\n\n\nBearish Diamond\n\n\n\nThe bearish diamond pattern is a trend reversal pattern that can help detect price momentum when reaching resistance levels. This pattern is commonly used to understand resistance lines.\n\n\n\nTypically, the pattern forms when the asset price approaches the resistance trend line, which can result in a sudden change in price direction. However, there are situations where the price breaks through the resistance trend line and continues its upward movement.\n\n\n\nThis pattern appears at the end of an upward trend and provides a strong signal of a trend reversal, often resembling the head and shoulders pattern.\n\n\n\nIs the Diamond Chart Accurate?\n\n\n\nDiamond patterns in technical analysis provide a method for predicting price movements in the financial market, but the accuracy of this pattern cannot be guaranteed entirely.\n\n\n\nLike other technical analysis tools, this chart also has limitations in consistency and price prediction. Some important factors, such as market conditions and trends, can affect the accuracy of this pattern.\n\n\n\nImplementing the diamond pattern strategy with wise risk management and confirming first with other indicators or additional charts is the key to its main success. Setting stop-loss and take-profit levels should be well-planned to minimize risks.\n\n\n\nHow to Read the Diamond Pattern\n\n\n\nBefore understanding how to use diamond patterns in crypto trading, it is recommended to first understand how to read the diamond pattern. This pattern in technical analysis requires an understanding of its characteristics and the signals it provides.\n\n\n\nBearish and Bullish Diamond Pattern - Chart by QuantVue on TradingView\n\n\n\nAs we can see in the chart created by QuantVue on TradingView above, it explains how to read the diamond pattern to identify bullish or bearish trends.\n\n\n\nNow, here are the steps that can be used as a reference in reading it:\n\n\n\n1. Identify the Previous Trend\n\n\n\nThe first step is to identify the market trend. The diamond pattern is an indicator of a trend reversal, so knowing the previous trend direction is important to correctly identify accurate signals.\n\n\n\n2. Understand the Formation Phase\n\n\n\nThis pattern also involves four main phases: peak formation, valley formation, lower peak formation, and higher valley formation. Knowing which phase is occurring can help traders understand the formation signals.\n\n\n\n3. Confirm with Other Indicators\n\n\n\nAs an additional step, confirm signals using other technical indicators. For example, check for divergence or convergence conditions with some indicators, such as MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index).\n\n\n\n4. Confirm Breakout\n\n\n\nThe main signal on this chart is a breakout, where the price breaks through one of the trend lines forming the pattern. Wait for breakout confirmation before taking action, as false breakouts may occur.\n\n\n\n5. Correction and Evaluation\n\n\n\nWhen the breakout occurs, make sure to monitor price movements to see if the pattern continues as predicted or undergoes correction.\n\n\n\n6. Pay Attention to Volume\n\n\n\nTrading volume is also crucial in reading this pattern. Breakouts supported by high volume tend to be more convincing than those with lower volume.\n\n\n\nHow to Use the Diamond Pattern for Crypto Trading\n\n\n\nUsing the diamond pattern for crypto trading is not too difficult. Why? Because, as traders, you only need to determine entry levels, set stop-loss points, and target profits.\n\n\n\nHere is a diamond pattern strategy that can be used in crypto trading:\n\n\n\nDetermine Entry Point\n\n\n\nThis pattern usually indicates a potential reversal in both bullish and bearish conditions. Therefore, sell or buy positions can be determined based on where this pattern appears.\n\n\n\nPlace a sell position if a bearish pattern forms at the end of an uptrend or place a buy position if a bullish pattern forms at the end of a downtrend.\n\n\n\nDetermine Stop-Loss Point\n\n\n\nPay attention to the stop-loss point as it will minimize potential losses. For the stop-loss level, it can be placed in some areas. You can place a stop-loss above the bearish diamond if entering a sell position or place a stop-loss below the bullish diamond if entering a buy position.\n\n\n\nDetermine Target Profit\n\n\n\nSetting a target profit with this pattern is relatively easy compared to others. Mostly, some experienced traders will set profit heights parallel to the height of the diamond pattern itself. However, one of the most ideal methods is to set a fixed risk-to-reward ratio.\n\n\n\nConclusion\n\n\n\nThe diamond pattern, as one of the patterns in technical analysis, contributes to identifying potential changes in market trends. Understanding this pattern is crucial to minimize risks and maximize profit potential.\n\n\n\nBesides, it\u2019s also essential to remember that the diamond pattern is not always accurate. Therefore, confirming signals with various additional indicators and implementing wise risk management is a crucial step in crypto trading.\n\n\n\nPersonal Note From MEXC Team\n\n\n\nCheck out our MEXC\u00a0trading page\u00a0and find out what we have to offer! There are also a ton of\u00a0interesting articles\u00a0to get you up to speed with the crypto world. Lastly, join our MEXC Creators project and share your opinion about everything crypto! Happy trading! Learn about interoperability now!","author":{"name":"Dhemas Putra","link":"https:\/\/blog.mexc.com\/author\/dhemas-putra\/"},"date":"Mar 28, 2024","dateGMT":"2024-03-28 07:50:43","modifiedDate":"2024-03-28 07:50:44","modifiedDateGMT":"2024-03-28 07:50:44","commentCount":"0","commentStatus":"closed","categories":{"coma":"Beginner's Guide<\/a>, MEXC Creators<\/a>","space":"Beginner's Guide<\/a> MEXC Creators<\/a>"},"taxonomies":{"post_tag":"","language":"English<\/a>","post_translations":""},"readTime":{"min":5,"sec":48},"status":"publish"}]">