July 8, 2022       /       Unchained Daily       /       Laura Shin

Daily Bits✍️✍️✍️

  • Aave proposed a new decentralized and over-collateralized stablecoin.
  • Decentral Bank, the protocol behind USN stablecoin, fixed a bug that briefly led to the minting of 10 trillion USN.
  • Reddit launched an NFT marketplace hosted on Polygon blockchain.
  • The American Bankers Association is warning against a US central bank digital currency.
  • Crema Finance’s attacker returned $7.6 million to the protocol and kept $1.6 million as a bounty reward.
  • Binance.US hired a new CFO ahead of IPO in the coming year.
  • Aztec Network, a blockchain focused on privacy, launched DeFi bridge Aztec Connect.
  • Compass Mining reduced its staff by 15% and also made salary cuts.

Today in Crypto Adoption…

  • MakerDAO passed a governance proposal to create a 100 million DAI vault for Huntingdon Valley Bank.

The $$$ Corner…

  • Hidden Road, a company that provides financial services for digital assets, raised $50 million led by Castle Island Ventures.
  • Tenderize, a DeFi protocol, raised $3 million in a funding round.
  • Konvoy Ventures, a VC focused on gaming, launched a $150 million fund.

What Do You Meme?

What’s Poppin’?

Celsius Gets Sued With Some Strong Accusations

By Juan Aranovich

Thursday afternoon, the anonymous account 0x_b1 revealed his identity and accused Celsius of some shocking practices. He said his name was Jason Stone, he had worked with Celsius, and he was suing the crypto lender.

His company, KeyFi, started providing services to Celsius in 2020. According to Stone, he was deploying DeFi strategies for Celsius, and was handed the private keys to the accounts that he managed for the crypto lender – all on a “handshake” deal. The funds that were managed by KeyFi were, in the end, customers’ deposits.

Celsius was supposed to be monitoring KeyFi’s strategies and hedging them against impermanent loss (when you provide assets in a liquidity pool and there’s a loss in the value of the assets).

However, in February 2021 Stone says he discovered that Celsius had been lying to him and that “the entire company’s portfolio had naked exposure to the market.” In light of this discovery, he says he decided to terminate his company’s relationship with Celsius.

After more than one year of disputes, Stone finally sued Celsius. In the lawsuit, he alleges that Celsius used customer’s BTC to pump the price of the CEL token and that Celsius failed to hedge against KeyFi’s trading strategies. He also said that Celsius did not perform basic accounting practices which resulted in a loss of $200 million that the company “did not even understand.”

In addition, he accused Celsius of being a Ponzi scheme. For example, Stone alleges that once it had a preponderance of customers wanting to withdraw their ETH, it began offering double-digit interest rates to attract new ones. He also says Celsius borrowed $1 billion from Tether at a 5% interest rate, but it offered its customers much more than that. Furthermore, the lawsuit describes how Celsius had massive liabilities to depositors denominated in ether but had not maintained ETH holdings equal to those liabilities.

Celsius was one of the many crypto platforms that had to freeze its customers’ funds. “The recent revelation that Celsius does not have the assets on hand to meet its withdrawal obligations shows that Defendants [Celsius] were, in fact, operating a Ponzi-scheme,” said the lawsuit.

The accusations came only hours after Celsius had repaid its entire debt to Maker, and had started showing some positive signs towards its recovery.

As of press time, no one from Celsius has yet responded to the allegations made by Jason Stone.

Recommended Reads

1) Hasu on MakerDAO Governance:

2) Frederick Munawa and Sage Young on Block Builders and MEV:

3) Zee Prime Capital on improving community distribution:

On The Pod…

Amir Haleem, CEO of Nova Labs and founder of Helium, talks about the use cases for Internet of Things (IoT), how blockchain and crypto help to construct a decentralized internet infrastructure, and what is the future of Helium. Show highlights:

  • what Helium is and what it is trying to solve
  • how, after struggling for years, introducing crypto tokens, finally helped Helium grow
  • who the users of Helium are and how they differ from each other
  • how Helium grew to have one million devices around the world
  • what the challenges and use cases of the IoT space are
  • why Helium decided to add new networks
  • why Helium is launching specific tokens for each of the new networks
  • what proof of coverage is and why it is useful
  • what an open-source cellular network is and how it would work
  • whether there is a need for some centralization of the network
  • what Helium’s roadmap is and what the major milestones are for the future

Book Update

My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, which is all about Ethereum and the 2017 ICO mania, is now available!

You can purchase it here: http://bit.ly/cryptopians