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This Week in Crypto #13

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Call it an exploit or an experiment in the algorithm that went wrong. Perhaps an unsustainable business model that expectedly backfired. The grace to grass story of Terraform Lab’s token LUNA and its algorithmic stablecoin, UST tanking in price to a few cents from $85 and $1.05 respectively, left many bewildered. But Terraform has a plan to keep its doors open despite some blockchains luring its developers and projects to abandon it for their platforms.

Vitalik Buterin, Ethereum’s co-founder and one of the most influential persons in crypto revealed his innermost thoughts and desires and one of them is for Ethereum to be as stable as Bitcoin.

Undeterred by the downswing in the crypto market, dozens of countries and financial institutions met in El Salvador to discuss Bitcoin, among other financial issues. Could this result in Bitcoin being adopted by entities and countries?

Blockchains hunt for projects on dying Terra as LFG prioritise small investors for compensation

The aftermath of the disaster that befell Terraform Lab’s coins spawned reactions from many people in the crypto community, including the bigwigs. Changpeng Zhao, the CEO of Binance, criticised Terraform’s business model and its response to the crisis. Ethereum’s co-founder, Vitalik Buterin described 20% yield promised by the project as “dumb”. Billy Markus, Dogecoin’s creator, sought for Terraform’s founder, Do Kwon’s exit from the industry.

Meanwhile, a compensation plan that will reimburse small-scale investors first may have been accepted by the LUNA Foundation Guard (LFG). The LFG stated, while giving account of how it deployed some reserve assets in a failed effort to save UST, that the remainder would be used to compensate small investors. Both Zhao and Buterin backed this plan.

But Do Kwon is unfazed by the mess his project created for investors and the smear it brought on the entire crypto world. Over the weekend, in a salvo of tweets, Do Kwon said he was “heartbroken” and admitted that UST could not be a decentralised money in its current form, further saying that he did not profit from the calamity. Days later, he announced a proposal to fork a new chain, Terra 2.0, from the old Terra chain. Both chains will co-exist.

While some projects are expressing support for the proposal, some blockchains, including Polygon, Binance and VeChain are offering incentives to developers and projects to abandon Terra chain and migrate to their platforms.

El Salvador hosts delegates from dozens of countries and financial organisations

A host of delegates from 44 countries visited El Salvador to learn about Bitcoin rollout as well as financial inclusion, and digital economy. El Salvador is the first country to make Bitcoin a legal tender. Its president, Nayib Bukele said delegates were made up of 32 central banks and 12 financial authorities. They would learn how the rollout of Bitcoin has benefited the country. The Central Africa Republic made Bitcoin a legal tender in April. Advocates of digital currency believe that this meeting would aid the adoption of Bitcoin as legal tender by other countries.

Web3 could hit 1billion users in 9 years, A16z report

An inaugural report on the state of crypto was made by venture capital firm Andreessen Horowitz (A16z). This report explored trends in the different aspects of Web3 innovations –  projecting that one billion users could be using Web3 by 2031. A16z also stated that Web2 platforms, including Facebook and Instagram charge more in marketplace fees than Web3 platforms such as the NFT marketplace OpenSea.

Royalty payments for Ethereum-based NFT creators totaled $3.9 billion through 2022, nearly four times more than Meta’s $1 billion reserve for creators. Ethereum was also reported to be the most dominant blockchain due to its early launch and large developer community.

Upgrade to Cardano chain on course

An upgrade to Cardano through the Vasil hardfork is still on track and expected to be on mainnet by June 29, 2022. This statement was made by Charles Hoskinson, the founder and CEO of Input Output Global, Cardano’s research and development team. Vasil hardfork will introduce new features such as referencing on chain scripts in the metadata of transactions.

This will allow to fit more transactions into blocks and boost the total value locked. Vasil hardfork has been named after the late Cardano ambassador Vasil Dabov. There are reports that the market reacted positively to ADA when the news broke. Time will tell whether this upgrade will give Cardano the scalability it desires.

Cardano’s Vasil hardfork release timeline (credit: Cardano chef pool)

 

Ethereum’s Buterin reveals his biggest worries

In what looks like a product of a conversation with his inner self, Ethereum’s co-founder Vitalik Buterin revealed inconsistencies in his thoughts and values that he is yet to resolve. Some of them touched on his desire to see Ethereum possess Bitcoin’s stability and for Ethereum to be a layer one that can withstand. It can be seen as contradictory, as projects on the chain already use fragile security systems

Ethereum crossed the $250 billion threshold in market capital, making it more valuable than top banks in the United States – Goldman Sachs and Wells Fargo.

Bitcoin Lightning Network coming to FTX

Sam Bankman-Fried, the CEO of crypto exchange FTX has said he would ask developers to integrate the Lightning Network, making Bitcoin a better and faster option for payments. He was forced to make the decision following an exchange between members of the Bitcoin community, including Bitcoin maximalist and CEO of Square, Jack Dorsey. Dorsey questioned his failure to mention that Lightning Network could be used more effectively where Bitcoin cannot, due to inefficiencies.

Non-fungible Apes to be traded on Binance NFT Marketplace

ApeSwap’s native token, Non-fungible Ape (NFA) will be listed on Binance’s NFT marketplace as soon as integration processes are complete. One thousand cryptographically generated digital apes will be traded on the marketplace.

Crypto is 95% Scam, says Dogecoin’s creator

The creator of Dogecoin, Billy Markus, infuriated some members of the crypto Twitter community when he affirmed without data that “crypto is 95 percent of scams and garbage and most crypto people are assholes”. Elon Musk, a popular promoter of Dogecoin, replied with a laughing emoji. Although Markus claimed that the tweet was meant to be educational and he preferred quality over quality, the reactions by many showed he had stirred the hornet’s nest. “Let’s change that,” Markus wrote. “It starts with you – what you support and how you behave.”


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