September 7, 2022 / Unchained Daily / Laura Shin
Daily Bits✍️✍️✍️
- Ahead of the Merge, Ethereum Name Service (ENS) flipped the Bored Ape Yacht Club as the number one collection in seven-day volume on OpenSea.
- Bankrupt crypto hedge fund Three Arrows Capital withdrew $45 million in staked ether from Curve and Convex.
- CTO Terence Schofield and head of capital formation team John Johnson resigned from Pantera Capital’s leadership team.
- Bitcoin fell below $19,000 a week ahead of the Merge.
- Bitcoin and Ethereum miner Hive Blockchain is testing other coins to mine after the Merge.
- Indian police arrested two people on suspicion of running a crypto scam affecting more than 1,400 investors.
- Frax Finance, a DeFi stablecoin protocol, launched Fraxlend, its native market for borrowing and lending.
- To avoid sanctions, Russia’s Finance Ministry is exploring stablecoin settlements with friendly countries.
The $$$ Corner…
- Crypto startup Fuel Labs announced an $80 million funding round led by Blockchain Capital and Stratos Technologies.
- 21Shares’ parent company raised $25 million at a $2 billion valuation.
- Credix, a decentralized credit marketplace, closed an $11.25 million funding round.
What Do You Meme?
What’s Poppin’?
Bellatrix Goes Live and Aave Stops Ether Loans
The Bellatrix upgrade went live yesterday, and the Ethereum Merge is now closer than ever.
The Merge is a two-step process, as was explained by the Ethereum Foundation in a blog post some weeks ago. It consists of two upgrades: Bellatrix and Paris.
The first one was successfully activated yesterday on the Beacon Chain, Ethereum’s Proof of Stake chain which has been running in parallel to the Proof of Work chain for more than a year. “Welcome to the New Beginning,” wrote the validators running the blockchain.
“The merge is still expected to happen around Sep 13-15. What’s happening today is the Bellatrix hard fork, which *prepares* the chain for the merge. Still important though – make sure to update your clients!” wrote Vitalik Buterin, founder of Ethereum.
The market initially responded positively to the upgrade, as ETH surged 6%. However, later in the day, the entire crypto and stock market took a turn and the token lost the gains.
Speaking of the Merge, DeFi protocol Aave passed a governance proposal to stop loaning ether for some days. The community was worried because users borrowed large amounts of ether ahead of the Merge. This would have increased the utilization rate (the percentage of the pool loaned out), which interferes with liquidation transactions and increases the chances of insolvency for the protocol.
“Ahead of the Ethereum Merge, the Aave protocol faces the risk of high utilization in the ETH market. Temporarily pausing ETH borrowing will mitigate this risk of high utilization,” said the proposal.
The community voted overwhelmingly in favor of this proposal, with 96% of token holders voting Yes.
In addition, Binance temporarily suspended deposits and withdrawals for ETH and ERC-20 tokens on multiple networks yesterday, as was previously announced by the company.
Recommended Reads
- Dune on stablecoins and proof of stake
- Adriano Feria on why ETH is money
- Bobby Ong on how to position for an ETH airdrop
On The Pod…
Arthur Hayes, cofounder of BitMex, discusses how he’s trading the Merge, the impact of macroeconomic policy in the markets, his career as a writer, and much more. Show highlights:
- why Arthur initially thought Ethereum was worthless
- why Arthur thinks that a successful Merge is understated and why this is a valid reason for hedging
- why he thinks an Ethereum proof of work chain won’t succeed and how Arthur will trade ETHPoW
- why LDO, Lido’s token, is a riskier bet but has more potential gains
- whether the Merge affects BTC’s narrative as digital gold and whether the inflation hedge theory of Bitcoin still holds
- why Bitcoin is a measure of USD liquidity and why the Fed rates don’t matter as much as everyone thinks
- what Arthur believes the impact of a potential US recession would be on the crypto markets
- how the credit cycle works and how it repeats again and again
- Arthur’s method for identifying good projects to invest in
- whether BTC is money and the religious aspect of the Bitcoin culture
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
