July 5, 2022 / Unchained Daily / Laura Shin
- CoinLoan, a crypto lender, lowers withdrawals limits due to market conditions.
- Vauld, a crypto platform based in Singapore, halted its operations amid financial difficulties.
- The Monetary Authority of Singapore is exploring regulating crypto-leveraged transactions.
- The British Army regained control of its social media accounts after being compromised by hackers using NFT projects.
- Argentines took refuge in stablecoins amid a confidence crisis due to the resignation of the Minister of Economy.
Today in Crypto Adoption…
- The Central African Republic launched “Sango Coin,” its national cryptocurrency.
- HTC launched a web3 phone with Ethereum and Polygon support.
The $$$ Corner…
- Crypto marketplace WonderFi acquired Canadian trading platform Coinberry for $30 million.
- CoinShares completed the acquisition of Napoleon Asset Management, which allows it to promote services in the European Union.
What Do You Meme?
Celsius Repays $142 million of Its Debt
Troubled crypto lender Celsius repaid $120 million of its debt owed to Maker yesterday. Last Friday, it repaid $22 million in DAI. Since the beginning of July, Celsius has reduced its debt by $142 million.
Maker is a decentralized protocol on Ethereum, which allows users to create vaults, deposit assets, and borrow money (in this case, DAI) against those assets. As the crypto markets started dropping heavily, Celsius found itself in a very delicate financial situation.
This financial crisis was what led Celsius to halt withdrawals from its platform last month, and was later followed by many other crypto lenders like BlockFi, Voyager Digital and CoinFlex.
With BTC prices plummeting, Celsius was very close to being liquidated. Ever since then, the crypto company has started to repay some of its debt in order to reduce its leverage. As of now, Celsius has 23,962 WBTC on Maker (~$475 million) and a debt of $82 million. This means that BTC would have to drop to ~$5,000 for Celsius to be liquidated, which puts it in a much healthier position.
Celcius also withdrew ~$70 million worth of ETH from AAVE and Compound, two of the largest and most important DeFi protocols on Ethereum, according to on-chain data. This operation calls into question what Celsius might do with that ETH. They could either be withdrawing ETH to sell it, which could potentially bring ETH price down, or they could also be removing it from the protocols to enable ETH withdrawals for retail users.
“We are focused and working as quickly as we can to stabilize liquidity and operations … We continue to take important steps to preserve and protect assets and explore options available to us,” said Celsius last Thursday.
Despite reducing its debt and showing some positive signs, according to The Block, Celsius cut a significant portion of its employees, as it dismissed 150 people.
1) Arthur Hayes on the Three Arrows Capital saga:
2) ChainLinkGod on Tokenized Real-World Assets:
3) Haym Salomon on DeFi protocol Synthetix:
On The Pod…
Hasu, strategic advisor to Lido, and Tarun Chitra, founder of Gauntlet, explain everything about staked ETH, aka stETH, how it should be priced, Lido’s market dominance, and much more. Show highlights:
- the role of Lido, what stETH is, and what its benefits are
- whether Ethereum’s lack of delegated proof of stake contributes to the need for stETH
- why stETH is not mispriced and why it doesn’t necessarily have to be worth 1 ETH
- the inherent risks associated with stETH
- how there was not enough liquidity to handle all the liquidations, especially in automated vaults on, for instance, Instadapp
- how automated market makers work and what Curve’s amplification factor is
- whether 3AC and Celsius had a significant impact on the stETH/ETH “de-peg”
- how does the Merge affect the liquidity of stETH
- Hasu’s and Tarun’s level of confidence that the Merge will happen this year and whether it will be a success
- what will happen to the price of stETH after the redemptions are enabled
- why Lido has achieved such a level of dominance
- how Lido decreases the cost of staking and helps improve the security of the Ethereum blockchain
- whether there is going to be a “winner take all” in the liquid staking derivatives market
- how liquidity fragmentation can cause the system to blow up
- why LDO tokenholders might not have the same incentives as ETH tokenholders
- what is the Lido’s new dual governance model and what is it trying to achieve
- whether Lido should self limit its market dominance
- how Lido coordinates validators and the role of the LDO token in this coordination
- what are the lessons to be learned from the stETH situation
- how governance is a liability to DeFi protocols
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