Terra's "Lehman Moment", Coinbase new Decentralized Social Media, Bored Ape Broke Blockchain Transaction
LUNA Down 97.5%, Bored Ape Broke Blockchain Transaction Fee Record, DESO the New Social Currency
1. Terra faces “Lehman Moment” Down 97.5%
This week, the third-largest algorithmic stablecoin by market cap, TerraUSD (UST) saw its value of its native token LUNA dropped by 97.5% down from its all time high of $119.80.
With increased pressure from Washington and regulatory crackdown, Terra and its founding team member Do Kwon has been scrambling to keep UST, the stablecoin of Terra and its ecosystem intact.
The stablecoin UST has been de-pegged and dropped to as low as $0.26 on on Wednesday drawing extreme scrutiny from the crypto community.
“This is crypto’s Bear Sterns/Lehman Brother’s moment, but here there are no [government] bailouts.”
As a result of losing its peg, Terra (LUNA), which backs the majority of the value of UST has also lost 97.5% of its value. The Terra ecosystem has seen billions of dollars worth of bitcoin getting reinvested to stabilize its UST stablecoin and now the feat is that the Luna Foundation Guard is selling those bitcoins in a markdown resulting in even a more serious sell-off.
Even if Terra can prop up UST back to its peg, can Terra maintain the trust within the ecosystem to continue holding its native token?
Singular’s Take: Terra’s founder Do Kwon last effort to commit $1.6 Billion to return UST back to its $1 peg , now trading at 70% discount. If LFG can successfully raise $1 billion without investors continue to sell off LUNA and UST, it could be a good risk/reward trade for short term traders looking to cash in on this black-swan event.
2. Bored Ape NFT Broke Blockchain Transaction Fee
Last week, Yuga Labs launched its latest NFT (Non-Fungible Tokens) called Other side, making the famous “Bored Ape” NFT to live in Metaverse-like virtual game and world. In just three hours, Yuga Labs recorded the largest transaction that have generated $317 million in less than three hours.
The launch went smoothly as NFT owners rushing to buy plots of land in the virtual world bidding of the transaction fees on the Ethereum blockchain called gas fees.
The highest gas fees paid by some user was $10,000 and about $5,800 for minting a virtual plot. Although Yuga Labs criticized the high user fees on the Ethereum blockchain, it was conducted as a Dutch auction and the proceeds of the transaction fees went towards the total purchase price of the virtual land for its users. Yuga Labs even went as far as criticizing the Ethereum blockchain and its design for its high gas fees.
Singular’s Take: We could see new venture investors looking to fund new NFT derivatives in the near future to help build the value of their communities more deliberately and sustainably instead of blaming the underlying Ethereum blockchain technology.
3. Coinbase New Decentralized Social Media
This week, Coinbase announced its building a Decentralized Social Media called (DESO) with a native token DESO designed to support various social media application.
DESO is acting like a wallet to purchase social tokens and NFTs and users can also create profile and posts on the platform. DESO will be launched on Coinbase Pro with the following pairs, DESO-USD, DESO-USDT and DESO-EUR.
Singular’s Take: Coinbase’s move to allow users to easily buy social tokens will spur the NFT and increase adoption of crypto. As we’re seeing the crypto markets going into panic selling, look to Buy the dips on blue chip crypto at a discount for BTC, ETH, SOL or AVAX.
Meme of The Week
FAANG (Facebook, Amazon, Apple, Netflix Google) is no more, and courtesy of a few company name changes we now have MAMAA (Microsoft, Alphabet, Meta, Amazon, Apple).