Happy Friday. It’s May 27, 2022.
The month of May is drawing to a close. Today is the last Litepaper of May 2022 — and we’re taking score of some of the month’s most insane reads today.
Why is it the last one of May, you ask? Monday is a national holiday and we haven’t started a five-day-a-week sync. We’re also kicking the daily news grind down the road a little bit for the next few days, replacing some of the day-to-day news with more curated stories about crypto and web3.
That said, let’s get into the action… the price action, that is:
Bitcoin was down -2.8% today to $28,720. Ethereum was down -5.2% to the magical Fetty Wap number, $1,738.
The only major crypto up today was Dogecoin, which was up +2.8% to $0.08123. I guess that’s worthy of a small celebration, but it’s still down -2.9% on the week.
And inside of the top-100 cryptos, the only other major gainer was the STEPN token. The crypto game rose +10% today, reaching as high as $1.14.
That all said, here’s the moves for today:
|Binance Coin (BNB)||
DeFi isn’t as Decentralized as it’s sold to be
On Monday, we ran an exclusive here in The Litepaper about how two DeFi apps lost millions worth of user funds. The most notable of those two startups, Stablegains, lost over $47 million worth of funds. Another, Alice, lost an undisclosed amount of money.
The two ill-fated startups fell victim to their own pitch — they made use of the Terra blockchain’s TerraUSD and Anchor Protocol, which was sold to investors as a “bank account-esque” product. However, it isn’t easy to go on chain… so Stablegains and Alice did it on behalf of users as a custodian.
That was a mistake.
We reached out to YCombinator, who hosted Stablegains as part of their accelerator and wrote a follow-on check just weeks ago. They did not respond to comment. Nor did Alice, the other startup we mentioned.
It’s unlikely that Alice or Stablegains will be the first or the last high-profile collapse of a crypto-backed “DeFi app.” We reached out to more than 10 of these opportunistic, custodial DeFi intermediaries about their risk models, if they insure user funds, and how they plan to safeguard and secure deposits. None of them responded for comment.
Terra is back… sorta
If there was any doubt that TerraUSD was dead, those doubts were dismissed today when the stablecoin got its new name today: TerraClassicUSD. It fell by -49% to $0.03372, making a massive leg down after several exchanges announced it would halt trading of so-called “Terra Classic” assets, which came about after the Terra community passed a proposal to launch Terra 2.0.
Tomorrow, Terra 2.0 will go live at 6:00 am UTC. Users who lost big on Terra’s first iteration can expect to unlock its first portion of a years-long vest, paid in the new $LUNA token. Details about the launch can be read on the Terra blog.
Popular no-loss lottery app PoolTogether raises funds for legal defense
One of the blockchain’s more imaginative and famous DeFi apps is being sued in the state of New York. They’re not going to take that lightly.
The popular PoolTogether no-loss lottery, allows users to put funds into liquidity pools. The more you contribute, the more lotto tickets you get. Then, the winner of the lottery gets the yield accrued from the pool. It’s a fun and imaginative, theoretically unrisky, DeFi game.
However, at its core, a class action complaint filed by a former Elizabeth Warren staffer claims that they’re running an illegal lottery. Among other obtuse asks from the staffer, Joseph Kent, is for “double attorneys fees” and “for everyone who put money into it to get double their money back” according to Axios.
To fight the legal challenge, the organization has sold an NFT collection to raise money and defend themselves against the case. As of today, they’re raised more than 200 ETH towards their 769 ETH goal.
Coinbase execs are selling out
A report published in the Wall Street Journal shows that four executives at Coinbase have sold over $1 billion worth of stock in the last three months. The sales have come amid an aggressive downturn in equities markets, and especially in the price of $COIN stock.
The named executives included co-founder Fred Ehrsam, CEO Brian Armstrong, and the company’s COO and CPO. They sold a combined $1.2 billion worth of shares.
Coinbase has fallen by over -70% since the start of the year. However, things might be looking up in the equities market: the company rallied more than 15% this week, in what was one of the best weeks for equities traders of 2022.