DeFi: Who’s Dead?
For those of you new to crypto and the Litepaper, let us get you up to speed with what’s been happening in the DeFi space:
Back in May, the cryptocurrency Luna ($LUNA.X) collapsed to nearly $0 along with its stablecoin (lol) UST ($UST.X).
One of the world’s largest and most well-known cryptocurrency hedge funds, Three Arrows Capital, was heavily invested in Luna to the tune of, allegedly, $200 million. They also had exposure to BlockFi ($BLOCKFI.P) and Axie Infinity ($AXS.X), the latter of which was hacked for $700 million last year. As a result, Three Arrows Capital was forced into liquidation last week.
The resulting fallout from Luna’s collapse caused massive sell-offs in the cryptocurrency markets. So much so that various cryptocurrency services froze customers from withdrawing, selling, or buying – Celsius is one of those services.
The collapse has been a contagion, exposing which companies and firms were overleveraged, which ones failed GAAP 101, which ones were morons, which are crooks, and which ones were smart – or lucky.