May 9, 2022       /       Unchained Daily       /       Laura Shin

Daily Bits ✍️✍️✍️

  • Bankless, the popular web3 podcast, was terminated by Youtube (and later reinstated).

  • Bitcoin fell below $35K for the first time since January.

  • Binance disabled derivatives trading in Spain and will be seeking regulatory approval to restart the program.

  • Twitter’s Bluesky released its first codebase for a decentralized social media network.

  • Smart money wallets are purchasing NFTs – even while the broader market is in a downswing.

  • Crypto muggers in London are targeting digital asset investors by stealing phones.

  • Robinhood added support for GBTC and ETHE.

  • The US Treasury sanctioned Blender.io, a crypto mixing service that allegedly has ties to North Korea.

Today in Crypto Adoption…

  • Instagram will support NFTs from Ethereum, Polygon, Solana, and Flow in a pilot starting today.

  • Google is building a web3-focused team.

  • WisdomTree, a US-based asset manager, believes its yet-to-be-released crypto wallet will help welcome the next 2 billion users into crypto.

  • Former Billboard President Julian Holguin is joining the Doodles NFT collection as its CEO.

The $$$ Corner…

  • Amber Group is looking to raise another funding round that would value the crypto trading platform at $8 billion.

  • Irreverent Labs, a blockchain gaming firm, raised $40 million in a recent funding round.

What Do You Meme?

What’s Poppin’?

UST Loses Its Peg

 

UST, Terra’s algorithmic stablecoin, lost its peg this weekend, falling to a low of $.986 on Saturday afternoon. Overall, UST, which is the third-largest stablecoin by market capitalization, traded below its peg for over 24 hours between Saturday and Sunday, according to data from CryptoRank.

The depeg of UST appeared to lead Terra’s governance token LUNA on a downward slide too. LUNA was trading at over $70 on Friday but has since sunk to below $65. The peg of UST is primarily maintained via LUNA, which is programmatically minted or burned to keep the price of UST pegged to $1.

Of course, as has been covered at length on Unchained, Terra is also backing UST with a reserve of crypto assets, including over $1 billion worth of BTC. As of press time, the BTC reserve has yet to be touched to correct the UST peg.

UST’s move away from its $1 peg appears to have begun with massive withdrawals from Anchor and a major swap from UST to USDC. To make matters worse, as pointed out by @resonancethis, the withdrawals were happening on a weekend, where liquidity is markedly lower than during weekdays. For example, at one point, there was only a $300 million cushion before Terra’s BTC reserves would have been put into action.

Critics of Terra were quick to point out that UST de-pegging, which now runs the risk of millions and millions of dollars worth of BTC being unleashed on the market to help maintain the UST peg, is a significant risk to the health of the crypto ecosystem at large. “Seriously though, it’s horrible for BTC that Luna is such a big holder – better to flush out all the bad now and enjoy a better bull cycle later without this risk hanging over our heads,” wrote @kamikaz_ETH, noted Crypto Twitter DeFi analyst.

However, other market participants, @CaetanoManfrini, believe the attack on the UST peg was coordinated. “​​Today’s attack on Terra-Luna-UST was deliberate and coordinated. Massive 285m UST dump on Curve and Binance by a single player followed by massive shorts on Luna and hundreds of twitter posts. Pure staging. The project is bothering someone. 🌝 on the right path,” he wrote on Twitter.

Notably, Do Kwon, Terra co-founder and LFG board member, retweeted Manfrini. Kwon appears exceedingly unperturbed by the entire episode.

 

Recommended Reads

  1. @cryptonesy on why the Yuga Labs land sale was a securities offering:

  1. Andrew Beal on web3 salaries:

  1. Julia Wu on understanding cross-chain bridges as flights:

On The Pod…

RAC and David Greenstein on Why Music NFTs Are Better Than Spotify

 

André Allen Anjos, who is better known as the crypto-friendly artist RAC, and David Greenstein, co-founder of Sound.xyz, a web3 music platform, analyze the current state of the web3 music scene and discuss how artists can leverage web3 tools to get paid at fair market value for their art. Show highlights:

  • RAC’s experience in the traditional music industry

  • why David believes music is the most undervalued sector in the world – and how Sound and crypto can help value it correctly

  • the different types of NFTs with which musicians like RAC are experimenting

  • what Sound.xyz is and how it is helping artists unlock their fanbase and community

  • why David is so passionate about creating a social experience when it comes to music NFTs

  • Sound.xyz’s decision to allow artists to deploy their own smart contracts

  • what RAC has made in NFT drops compared to Spotify streams

  • why Sound.xyz was built with “editions” as the most common format for NFTs sold on the platform

  • what makes blockchain technology well-suited for the music industry

  • RAC’s crypto adventures: $TAPE, $RAC, and more …

  • how the famous “Amen Break” sample would work as an NFT

  • what artists will be measured by in the NFT world

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