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Elon - Twitter saga.

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Written by   14
3 months ago

If you’re interested in crypto, you probably pay at least a little attention to Elon Musk’s Twitter account. The memes and musings he’s shared over the years have helped spark market frenzies and sell-offs alike, which is just one reason why his latest move, a bold attempt to take over Twitter, has Crypto Twitter completely spellbound — DOGE (Musk’s favorite memecoin) even spiked 10% after Musk’s stake in Twitter was made public. But why else is the crypto industry following this story so closely? Let’s dive in.

  • The saga started on April 4, when Musk disclosed purchasing 9.2% of Twitter’s stock. Soon after, Twitter CEO Parag Agrawal announced that Musk would be joining Twitter’s board of directors. Then, a few days later, Agrawal announced that Musk wouldn’t be joining, and the Tesla CEO offered to buy the social media company outright for $43 billion and take it private. Last week, the board implemented a “poison pill” provision — designed to make it too expensive for Musk to buy Twitter by granting shareholders the right to buy more Twitter shares at a discount if Musk increased his stake past 15%. 

  • Why does Elon even want Twitter? At least according to his own statements, he wants to protect Twitter’s role as the “de facto town square” of the internet by encouraging “free speech” and limiting content moderation. Another change Musk floated was making the Twitter feed algorithm “open-source” — an idea that’s also been endorsed by Twitter founder Jack Dorsey. (Open-source code is also key to the decentralized ethos underpinning many blockchain applications.)

  • The potential for a “decentralized Twitter” inspired some prominent crypto players. FTX founder Sam Bankman-Fried mused about encrypted on-chain tweets, while Cardano founder Charles Hoskinson offered to help Musk build a decentralized alternative to Twitter. But the prospect also spurred plenty of crypto-community criticism. Dogecoin co-founder Jackson Palmer voiced discomfort with the world’s wealthiest individual launching a hostile takeover of a public company. Ethereum co-founder Vitalik Buterin, who has no issue with Musk owning Twitter, warned that similar hostile takeover bids from other wealthy individuals or groups — like those from “ethically challenged foreign governments” — could “easily go very wrong.” 

  • Twitter has already been funding a decentralized social media project called Bluesky, which is building a “decentralized protocol for public conversations” that will allow users to control their relationships with audiences and let developers innovate on top of the protocol without needing permission. Elsewhere, Web3 developers are working on related concepts. A project called Entre, for example, is focused on connecting working professionals. Each user profile is an NFT, with connections documented on the DeSo blockchain.

Why it matters... In the days after Musk’s takeover plans emerged, investors were skeptical — in part because it wasn’t clear how the Tesla CEO would finance the purchase. We know this because Twitter’s stock price initially remained stagnant. But by this week, as other potential admirers began eyeing the company, Twitter’s stock price finally spiked — in part, some analysts say, due to enthusiastic retail investors drawn to the drama. And while no one can say what’s going to happen next in this crazy saga, we all know where we'll hear the news: Twitter

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Written by   14
3 months ago
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