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The rise and the fall of an empire, or two, or three... (crypto updates for May 2022)

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1 month ago

I was on holiday, for 10 days, and I reduced my online presence to enjoy some me-time. I couldn't choose a better time, as I found out about UST and LUNA when everything had already happened. I did have some losses, as I happened to own 140 LUNA, so I may say that my portfolio decreased by $10-12K because of that. Still, life goes on, I was just exposed to the token, but not all-in. So, I will cover now the last 2 weeks, instead of my usual one week, for this post. There is only one place where I got all-in, without rebalancing, and that's the Splinterlands blockchain game, only because my in-game assets pumped x20, and I feel that they are still underpriced. Other than that, BTC is testing 31K again and again, ETH 2.0 preparations are going well, and the NFTs marketplace is more active than ever. What else? Read below:

• Bitcoin: In the middle of all the market turmoil, the president of El Salvador bought another 500 BTC, at $30K each. More than that it seems that 44 countries will send their representatives to meet in El Salvador to discuss Bitcoin, most of them being small nations like Madagascar, Guinea, Angola, Pakistan, Nepal, Nigeria, Egypt, and Bangladesh. 32 of them are representing central banks from those countries. Bitcoin is testing both $25K and £31K, mostly on the upper limit, but it seems that it is missing the firepower necessary to reach $36K at least. Microstrategy bought 129218 BTC in the last few years, with a price average of $30700. They are in red lately, but Saylor seems to be confident and not concerned at all. As per the latest ruling in China, Bitcoin is protected by Chinese law, deemed to have economic value, and recognized as virtual property. I wonder how long this will last. One recent report suggested that Chinese miners account for 21% of the BTC hash rate. Bitcoin was the least volatile asset in April at 48.7%, isn’t that crazy?

• Ethereum: Ethereum developers will perform the merge hard fork on the Ropsten testnet on June 8, so we are getting close to the ETH 2.0, with every passing day. Will this happen in 2022? We will see. Lido Finance (LDO) became the largest DEFI protocol in terms of TVL, with $19.4B at the moment, as the leading liquid staking platform on the Ethereum blockchain. In the liquid staking case, you delegate tokens to a staking service, but hold derivative tokens for the same value. Vitalik Buterin sent 500 ETH to Dogecoin Foundation, to help them with their transition to a Proof of Stake mechanism. What is happening there? Meanwhile, ETH fees increased 21% up to $513M in April, as Ethereum offered minus 16.9% monthly returns.

• Altcoins: SPS (yeah, that Splinterlands governance token) is getting ready for Delegated Proof of Stake (DPoS), working on their validator node software, which is currently in the internal testing phase, and working on some licenses that can be purchased with SPS + VOUCHERS tokens, and we are looking at 3.75M SPS ($300K today) paid monthly as rewards. The node licenses never expire, bringing rewards indefinitely. Do you remember me mentioning FLOW a few times in the past year? If you did invest in it, now is the time to reap your rewards as they just announced a new $725M ecosystem fund, created to support gaming, infrastructure, DEFI, and content creators, and they were also added on Coinbase a few days ago. In April, Justin Sun announced that a new algorithmic stablecoin will be born, on Tron Network, USDD, and TRX bounced up 6% after the announcement, USDD is also available on ETH and BNB. It seems to be a Terra (LUNA)’s UST copycat, with 30% APY instead of UST 18%, and this is worrying on so many levels. Read the LUNA and UST story below and find out more about it. To stop people worrying, a stash of $38M worth of TRX was assigned as a reserve for the USDD, and there are 220M USDD in the network right now. The NFT’s minting on Candy Machine game on Solana brought another 2-3 hours outage. Their last outage in September last year lasted 17 hours, so, at least this aspect seems to be improved. Bancor version 3 goes live. In the wake of the Luna hurricane, even USDT got some collateral damage, and it went down to $0.95, but it is recovered by now, being stable at around $0.99-1.00. $7B was moved out of USDT, the total supply value dropping from $83B to $74B. ETH went down 40%, and the rest of Layer 1 Altcoins (AVAX, SOL, NEAR) went down more than 50% too. AURORA is a token fund worth $90M helping to scale DApps built on NEAR protocol. Keep an eye on them. Juno did a programming error and sent $36M worth of funds to the wrong address on the blockchain, which nobody has access to, during the airdrop. Now, they want to seize the assets via community voting, and they said that this is a whale gaming the airdrop instead of the truth. Liar, liar! Fantom DEI stablecoin started to lose its peg too, being $0.54 right on Wednesday. Lens Protocol, AAVE’s decentralized social media platform, is now on Polygon blockchain, and you have full control of your content and full ownership of your data. Still, Hive is doing this for a few years already, and I always wonder how they are not so popular right now. Helium (HNT) is doing some interesting moves, looking to restructure and transform the network into a decentralized platform. Wow, an airdrop would be cool.

• Blockchain games and NFTs: NFTBerlin will take place in Berlin from 25 to 27th of May at the ‘Alte Munze’. Many famous collectors’ private collections will be displayed. A16z has launched a $600M gaming fund, Games Company ONE, with Roblox, Discord, Riot, and Blizzard being some of the investors supporting him, aiming to invest in game studios, apps, and infrastructure. Solana NFT Marketplace Magic Eden topped OpenSea in daily trading, with 275K transactions as compared with 50K on OpenSea. Still, there is only $10M on Solana compared with $35 on Magic Eden. Illuvium Land plots are here, with 5 Tiers, costing progressively 2,6,20 and 80 ETH. Personally, I believe this is too expensive, given their current activity. Yuga Labs sold their 55K virtual plots for $7K on average, leading to an increase of $APE price and almost crashing the ETH network. OpenSea Discord server was hacked, again, promoting a scam NFT mint, and less than 10 wallets were impacted, losing almost 10 ETH. The phishing scam link was shared on the announcement channel. In a feeble attempt to capitalize on the NFTs fever, Instagram wants to integrate NFTs on ETH, MATIC, SOL, and FLOW, starting to test it as soon as Monday. Blockchain gaming firm Irreverent Labs raised $40M to create a robotic chicken game called MechaFightClub. Azuki founder, Zagabond, admitted participation in some rug pulls in the past, and the floor price for his NFT collection dropped from 19 to 10.9 ETH. Azuki’s price is still going down. APE owners will soon be able to mint apeUSD, another synthetic stablecoin. Curve pools will be launched, along with another 825 NFTs to bootstrap liquidity. Square Enix sold the Tomb Raider franchise for $300M and wants to invest and expand into NFTs, assisted by Animoca. Is there a Final Fantasy NFT collection coming up? We can only dream about it. Fuzzles – first Artificial Intelligence NFTs, they can give you advice (great line of defense: my NFT made me do it!), tell your fortune and even talk with you if you feel lonely. Metaplex, a Solana NFT maker, wants to introduce a bot tax to let the humans have a chance to mint their own NFT. If you didn’t know, they are the ones who forced the Solana network to go offline for 7 hours when they tried to mint the NFTs for their Candy Machine blockchain game and with only 0.01 SOL as a botting penalty; they already generated more than $80K in penalties. Spotify is testing a way for an artist to display their music as an NFT collection, and I am very happy with this one. Universal Music Group has signed a deal to let artists release NFTs on their upcoming music platform, LimeWire (we talk about BTS, Taylor Swift, Kendrick Lamar, Rolling Stones, Elton John, and many others). There is a new bad boy called ‘Project Arcanas’, an RPG using NFTs for specific characters or in-game items, developed by a less known Azra Games. The blockchain used is yet to be known. The blockchain game Sorare partnered with the Major League Baseball, so we will see some cool NFTs soon. I was trying to test the STEPN walk2earn app, but while creating the account and getting the invitation code was a minor inconvenience (use stepn invitation tag on Twitter to hunt for the latest codes, and you are done in 5-10 min), the fact that a starting NFT shoe price is starting from 15 BNB ($4500) is quite a huge nightmare. I do not see this investment as wise, irrelevant of how much you walk or run every day. So, I will not test it for the moment.

• Good news: Now this is how you make a crypto-friendly country, as Germany said that crypto capital gains are exempt from taxes if you hold them for more than one year. More than that, income from BTC and ETH staking and lending is also tax-free after one year. Well done, Germany! FTX.US is launching a zero-commission stock trading on its exchange through FTX Capital Markets. Gucci is accepting crypto as payment in some of their US locations, including BTC, BCH, ETH, LTC, DOGE, and SHIB. France has given Binance a digital asset provider license to operate in the country. Beanstalk stablecoin (BEAN) wants to raise a mere $77M in an OTC loan from private investors to revive the project, paying a 500% yield until the loan is repaid. Too good to be true? Napster is back, being acquired by Algorand (ALGO) and Hivemind. Kucoin exchange raised $150M in a funding round, is now valued at $10B, and wowing to use this money to expand into Defi, NFTs, and blockchain games. Sam Bankman-Fried bought a 7.6% share in RobinHood, as he said this one can be an attractive investment, with no intention to change or influence the company's direction. That was what Elon said too! Coincidence or not, soon after, Robinhood announced its upcoming crypto-wallet, with no gas fees and supporting NFTs. Japanese banking giant SBI bought a 51% stake in Bitpoint Japan, a crypto-trading platform, paying $99M, and on top of that, they also bought a 5% stake in Remixpoint, trying to expand its business into the crypto-market. Google is forming a Web3 team to build services for developers running blockchain apps

• Bad news: Now, Coinbase was a bit naughty, introducing something along the lines that customers may be liable and lose their money if the company goes bankrupt. Not getting any popularity points with that, saying that you lose all your money if we lose our money, Coinbase. And their CEO, Brian Armstrong, was quick to point out that this is not true, and they are not close to being bankrupt, and so on, but not very convincing. Well, I have only $500 worth of crypto on Coinbase, and I do not trust them, anyway. Yet, this did not stop Ark Investment Management to buy half a million Coinbase shares after their price dropped below $55. Portugal is changing their tax law, which excluded crypto gains until now, and it is no longer a crypto tax heaven. Mark Cuban suggested staking 1 Doge for the user on Twitter, and whoever validate that a bot is posting to gain the Doge, raising the bar for the bot stake to 100 Doge, and Dogecoin creator approved, with Elon Musk saying that this is not a bad idea. Will Doge pump now? You can bet on it. Crypto.com was once again in the spotlight, pulling the same dirty move as they did with the Monacoin a few years ago. They drastically cut all the rewards, leading to CRO price falling hard, and then they reconsidered, meeting us somewhere in the middle. Meaning that they threaten with a 100% decrease and then they said: Ok, just 50% because we are the good guys. As the result, the rewards dropped, and people feel like they had something to say and it was not a cheap market feeling manipulation indeed. Wikipedia stopped accepting crypto donations. Rari Capital was hacked and more than $80M was lost from the Fuse lending pools. The hacker was asked to return the stolen funds in exchange for a $10M bounty. US Court ordered the three Bitmex co-founders to pay $30M for money laundering rules violation, as they failed to implement and enforce effective controls to prevent or detect unlawful conduct. Word of advice, talking about crypto in London can get you mugged, as thieves targeted a guy at knifepoint and made him unlock his crypto-wallet to transfer all his holdings to them. The European Central Bank is working to create its own CBDC, and it is luring people by telling them that this will be a great way to have an easy time when you are in Europe on holiday. Yeah, there is Travala for all this stuff already. No need to make some rich people even richer.

• Terra (LUNA) and UST: This one definitely needs one category for itself this time. On the 6th of May, Luna bought $1.5B in BTC, via OTC swaps with Genesis Trading and Three Arrows Capital. This brought their reserves to $3.5B out of the $10B projected. On the 9th of May, LUNA dropped 10%, down to $65, as UST looked like is close to losing its peg, at 0.985. Little did we know about what fresh hell was to be unleashed in the next few days! On the 10th of May, UST dropped to $0.69, despite a loan from the Bitcoin Reserve (with $750M in BTC and $750M in UST), and $250M in funds were liquidated in the next 12 hours. On the 11th, they were looking to borrow $1B from large investors to restore UST’s parity, offering Luna at a 50% discount. They did not find it, as many could see already, that even 99% of nothing is still nothing. Then an alternative solution was proposed, to burn all the UST on Luna, $370M of UST on ETH, and stake 240M of Luna to defend the network. However, by now the UST price was 0.60, and Luna's price was $0.02. The network was halted twice, looking for some on-chain stability, which didn’t work, and this time Luna was $0.008 and UST was $0.19. Meanwhile, Crypto.com barred users from trading, as their own system could not keep up with the LUNA price, and some made x30-x40 profit from arbitrage before seeing all the trades reversed, and Crypto.com complained about a glitch, offering them to buy Luna at the actual price, which was $0.0004 right then. Now everybody is talking about a hard fork, similar to the one that brought us Ethereum Classic, but CZ of Binance said that a fork will not work, and they should use their Bitcoin to buy back UST and fix the peg. Isn’t it a bit late to do that? The new “Revival Plan” is going to start soon, I FOMO-ed and bought 100K Luna just in case, $10 may be lost forever, but it is worth a try. SEC is now investigating what happened with Luna, even if Kwon is not a US citizen. Even the politicians from South Korea want to hold a hearing on Terra UST’s disaster and the main question is why most of the exchanges did not stop trading even after the crash, earning close to $8M in fees in commission income. This could be tricky, as new information surfaced about him being behind the failed Basis Cash (BAC) stablecoin, which never achieved dollar parity and was most probably a pilot project for Terra (LUNA). Even Terra Legal Team resigned after this wild week. US Treasury Secretary Janet Yellen pushed now for stablecoin regulation by the end of the year. Celsius – the lending app, managed to pull back 231K ETH ($535M) from Anchor when the chaos started.

• Joke of the week: The Hive-Steem wars – last chapter. Once upon a time when somebody wanted to gain control of the whole Steem blockchain (not saying is Justin Sun), achieving the majority, they manage to steal quite a few million in Steem (the tokens), and somehow they got stuck on Bittrex. After many, many years, the tokens were returned to the Steem account, only to be promptly sent to the thief account and sold. I repeat those were people’s money, the ones who were using and staking their own tokens on Steem. Why is this one a dead blockchain (more or less) and why is Hive thriving? (Hive was a fork of Steem where all the people who did not agree with the centralization of the blockchain moved and created this one. Most of the active DApps moved from Steem to Hive too. I have even heard that a movie will be made about it soon.) Draw your own conclusions!

All the best,
George

Why not...

...have fun and win rewards on my favorite blockchain games (Splinterlands- Hearthstone-like card game) (Mobox - GamiFI NFT platform) and (Rising Star - Music creators game).

...get the higher rewards for your investments using Blockfi, Hodlnaut, and Celsius. network. Get crypto while writing on the Publish0x blog, using the Presearch search engine to maximize your income with PRE tokens. Use Torum instead of Twitter. I am also writing for crypto on Read.cash and Hive.

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