Crypto Guides, Knowledge & Insights

Terra Crashed Spectacularly. Here's How It Launched.

TerraForm Labs spent four years building its ecosystem and connecting it to other blockchains before things began to unravel earlier this month. 　　When the TerraUSD algorithmic stablecoin (UST) lost its peg, millions of dollars were wiped out in a matter of days. The coin, which used to carry a redeemable-for-a-dollar guarantee, has been trading for just a nickel. And LUNA, its governance token, which last month had a market cap of more than $30 billion, has seen that metric slip to $680 million.　　The company behind it all got its start in 2018.　　Business partners Do Kwon and Daniel Shin founded Terraform Labs in January, and that April registered it as a private limited share company in Singapore.　　By August, Terraform had completed a $32 million raise that included Translink Capital, Polychain Capital, FBG Capital, Hashed, 1kx, Kenetic Capital, and Arrington XRP. Four of the largest crypto exchanges—Binance, OKEx, Huobi Capital, and Dunamu—invested in Terras Layer-0 blockchain as well.　　From the onset, Terra wanted to become a payments giant that could rival the likes of Alipay and PayPal. Shin, the founder of Korean e-commerce giant TMON, would later help bring more than 20 other companies to the table to form the Terra Alliance and

2022-05-22Deep Dive

Russia Trade Minister：Legalizing Crypto Payments Will Happen "Sooner or Later"

Within months, the sentiments to ban cryptocurrencies in Russia have changed dramatically, and at present, key government officials are the ones advocating for ways to incorporate the nascent asset class into the system.　　In a recent revelation, Russias Minister of Industry and Trade Denis Manturov said the move to legalize cryptocurrencies as a means of payment in the country is bound to happen “sooner or later.” The claims were made at a forum Wednesday when the minister was asked whether crypto will become a legal payment method in the country.　　“The question is, when this happens, how it will be regulated, now that the central bank and government are actively working on it,” he replied. “But everyone tends to understand that ... sooner or later this will be implemented, in some format or other.”　　The Russian government and the Central Bank of Russia (CBR) have divergent views when it comes to how cryptocurrencies should be handled. While the government submitted a counter-proposal that will prevent a blanket ban and harsh fines on cryptocurrencies back in February before the ongoing war with Ukraine kickstarted, the stance of the Industry and Trade minister suggests both parties are beginning to shift grounds.　　What Bitcoin Can do for

2022-05-22Deep Dive

Do you have the right to redeem your stablecoin?

Stablecoins are often discussed with regard to their “stability.” It is usually questioned whether a stablecoin is sufficiently backed with money or other assets. Undoubtedly, it is a very important aspect of stablecoin value. But, does it make sense if the legal terms of a stablecoin do not give you, the stablecoin holder, the legal right to redeem that digital record on blockchain for fiat currency？　　This article aims to look into the legal terms of the two largest stablecoins — Tether (USDT) by Tether and USD Coin (USDC) by Centre Consortium, established by Coinbase and Circle — to answer the question: Do they owe you anything？Tether　　Article 3 of Tethers Terms of Service explicitly states:　　“Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves the right to redeem Tether Tokens by in-kind redemptions of securities and other assets held in the Reserves. Tether makes no representations or warranties about whether Tether Tokens that may be traded on the Site may be traded on the Site at any point in the future, if

2022-05-21Deep Dive

A16z Launches $600 Million Web3 Gaming Focused Fund

A16z Doubles Down on Gaming　　Executives at a16z seem to be enticed by the intersection of metaverse, Web3, and gaming happening now in the industry. The company has announced the launch of a $600 million gaming fund called Games Fund One, which seeks to power startups in the industry in three key sectors, including gaming studios, gaming relationships, and infrastructure building.　　The fund, according to the company, bases its operation on the belief that “games will play a pivotal role in defining how we socialize, play, and work over the next century.” This is a natural step up from the investments that the company has made in traditional and Web3 gaming startups, including Epic Games and companies like Metatheory and Sky Mavis.　　On how the fund might help their portfolio startups, the company stated:　　We will continue to add more functions and develop deeper networks that are tailored to the games ecosystem so we can help our portfolio companies with everything from building digital communities, to managing their virtual economies, to IP licensing best practices, to helping build their development teams.A Metaverse Opportunity　　A16z supports the idea that these investments will also be key to the development of the metaverse, an alternate world in which

2022-05-21Deep Dive

Bitcoin 'death cross' data hints 43% drop due in BTC price bear market

Bitcoin (BTC) may fall more than 40% from last weeks bottom, new data warns as one analyst confronts what he says is now a bear market.　　In a series of tweets on May 20, popular trader and analyst Rekt Capital argued that BTC/USD should dive to near $20,000 to conform to historical norms.Death cross BTC price target now $22,700　　Much debate has surrounded the so-called “death cross” constructions on the Bitcoin chart. These involve the declining 50-period moving average (50MA) crossing under the 200MA.　　Often in the past, such an event has triggered considerable price downside, this then going on to mark what Rekt Capital calls “generational bottoms.”　　“More often than not, the depth of a $BTC correction pre-Death Cross is similar to retrace depth post-Death Cross,” he summarized.　　Both March 2020 and May 2021 broke the rules when it comes to post-death cross losses, however — in both instances, the death cross, itself, marked the bottom.　　In January 2022, the historical trend seemed to return, as a death cross event came after BTC/USD had already declined 43% from its November 2021 all-time highs of $69,000. 　　Another 43% from there, however, puts the pair at $22,700.　　“Whats interesting about the scenario of a -43% post-Death Cross crash

2022-05-21Deep Dive

Australias Commonwealth Bank Halts Crypto Rollout

Commonwealth Bank of Australia (CBA) announced on Thursday that it has paused the rollout of cryptocurrency trading through its banking app amid uncertainty in the market.　　In November, the largest bank in Australia announced plans to allow its customers to purchase and sell crypto through its banking app.　　The Commonwealth Bank had been working on the initial pilot project, with plans to progressively launch more features to more customers in 2022.　　Sources show that the lender has paused the pilot project, with no timeline set for when the second pilot would resume. Individuals who participated in the initial pilot have not been able to continue trading cryptocurrency through the app.　　Matt Comyn, the CEO of the Commonwealth Bank, commented that the firm was working on the feedback obtained from customers, but disclosed that more regulation would be required before moving on to the next stage.　　“As events of the last week have reinforced, it is clearly a very volatile sector that remains an enormous amount of interest. But alongside volatility, awareness, and the scale, certainly globally, there is a lot of interest from regulators and people thinking about the best way to regulate that,” the executive stated in a tech briefing this week.　　The federal Treasury

2022-05-20Deep Dive

Has Bitcoin Reached a “Generational Buying Opportunity”?

Bitcoin is consolidating around $29,000 as the RSI indicator has now entered a period that has historically preceded outsized returns on investment for long-term investors. Rekt Capital shows that when the RSI has reached this level previously and reversed, including January 2015, December 2018, and March 2020, it has marked a macro bottom.　　Furthermore, Glassnode shows that Bitcoin is approaching a region that is below the average cost basis of all holders on-chain. Previously, when Bitcoin enters this region it has presented four generational buying opportunities. Both of these indicators suggest that the crypto markets could be nearing a bottom for this bear-market we are in.　　The established DeFi lending platform, Aave, has announced the launch of Lens Protocol, a decentralized social graph that uses NFT assets to power social media platforms. It lets users own their content by storing it as NFTs within a crypto wallet.　　Lens Protocol have chosen to build on Polygon, as it enables faster and cheaper transactions than Ethereum. This makes Polygon more suitable for a social network built around a potentially large number of NFT assets.　　Aave CEO Stani Kulechov said, “We believe that content creators should own their audiences in a permissionless fashion, where anyone can build

2022-05-20Deep Dive

Do Kwon Dissolved Terraform Labs Korea Days Before Collapse of Terra LUNA, UST

Do Kwon Shut Down Terraform Labs Korea Before UST and LUNA Fallout　　Terraform Labs founder Do Kwon reportedly closed down his company in Korea days before the collapse of cryptocurrency terra (LUNA) and stablecoin terrausd (UST).　　According to South Koreas supreme court registry office, Terraform Labs Korea decided to dissolve its Busan headquarters and Seoul branch at the general shareholders meeting on April 30, Digital Today reported. The company named CEO Kwon Do-hyeong, the full name of Do Kwon, as the liquidator.　　The publication detailed:　　On May 4, Terraform Labs Koreas headquarters was dissolved and on May 6, the Seoul branch was dissolved.　　On May 9, UST lost its peg to the U.S. dollar and its price kept falling. At the time of writing, it is trading at about $0.08. LUNA also sharply fell from above $80 on April 30 to $0.00013351 at the time of writing.　　While Terraform Labs is a Singapore-incorporated company, it was registered to conduct business in South Korea as Terraform Labs Korea, with headquarters in Busan and a branch in Seongdong District in eastern Seoul.　　Kwon founded Terraform Labs Korea on June 21, 2019. On Sept. 26, 2019, Ticket Monster (Tmon) founder Shin Hyun-sung joined the company as the second co-founder. However,

2022-05-20Deep Dive

BoE's Cunliffe Warns Crypto Will See Tough Times as Fed Tightens Financial Conditions

Bank of Englands deputy governor for financial stability, Sir Jon Cunliffe, has warned of hard times ahead for cryptocurrency investors as the Federal Reserve and other central banks tighten monetary policy.　　Bank of Englands Executive Warns About Crypto　　Sir Jon Cunliffe, deputy governor for financial stability at the Bank of England (BOE), had a warning for crypto investors at a Wall Street Journal conference Tuesday, Reuters reported.　　The Bank of England executive cautioned that crypto investors should expect more difficult times ahead. He explained that as the Federal Reserve and central banks around the world tighten financial conditions, investors will be more attracted to safer assets.　　Replying to a question about whether rising interest rates would ramp up pressure on cryptocurrencies, Cunliffe was quoted as saying:　　“Yes, I think as this process continues, as (quantitative tightening) starts in the U.S. … I think well see a move out of risky assets.”　　Federal Reserve Chairman Powell said last week that the Fed will continue tightening monetary policy until it sees “clear and convincing” evidence that inflation is falling to the target rate of 2%.　　Cunliffe also discussed another factor affecting the crypto market. Noting the Russia-Ukraine war is prompting investors to move funds into safer assets, he advised:　　“When

2022-05-20Deep Dive

SWIFT Plans To Interlink All CBDCs

Even as central banks of various economies explore CBDCs, SWIFT is advancing cross-border payments involving digital currencies. While most of the central bank digital currency (CBDCs) focus on achieving digitalization of fiat currencies, SWIFTs latest move aims at cross-border payments.　　SWIFT is the global standard for payment and securities trade transactions. The new project, along with Capgemini, focuses on interlinking between various CBDCs being developed around the world.　　Interlinking Major CBDCs　　Thomas Zschach, chief innovation officer, SWIFT, said,“Today, the global CBDC ecosystem risks becoming fragmented with numerous central banks developing their own digital currencies based on different technologies, standards and protocols.”　　In this regard, the SWIFT payments system collaborated with Capgemini for conducting new experiments to test the interlinking of domestic CBDCs, it announced.　　Sudhir Pai, chief technology and innovation officer, Capgemini, said,“Navigating decentralisation is complex with many technology choices, operating models, and policy considerations. Our well-defined taxonomy has helped us accelerate our efforts to build CBDC interlinks with SWIFT.”　　In 2021, SWIFT conducted a CBDC experiment that successfully demonstrated cross-border transactions. The transfers were held between one entity on CBDC network and an real-time gross settlement (RTGS) system.　　Also, certain central banks are building CBDCs using a centralised architecture, while others are using distributed ledger technology.

2022-05-20Deep Dive

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