The SEC Released a Report on Terra
The SEC’s report has a few stunning revelations:
There was a secret bailout of UST in mid 2021. For a brief period of time, UST lost its peg, and Do Kwon worked together with an “unidentified trading firm” to re-peg UST, by getting them to buy large amounts on the open market. This misled investors, giving them confidence that the peg was regained due to the algorithm working.
The Block has reported that this “unidentified trading firm” is Jump Trading. Jump profited approximately $1.28b from this relationship, by being rewarded in LUNA tokens at a price of $0.40 a token when the market price was $90.
The Terra team used the Chai payments network to show high usage of the blockchain. In reality, real world transactions were being duplicated and sent to Terra as if they had originated there.
Do Kwon has a secret stash of 10,000 bitcoin and has sold more than $100m worth since UST collapsed. He managed to cash it out to an unnamed Swiss bank account, where he has withdrawn over $100m in the past 8 months.
Kwon’s exact location remains unknown. He has reportedly been spotted in Serbia. Interpol has put him on a watchlist.
The NFT Platform Wars Heat Up
NFT Marketplace Blur launched a token last Tuesday, along with a rumored fundraise at approximately a $1b valuation. The airdrop distributed 12% of the supply (360m tokens) to engaged users. Blur differentiated itself from Opensea via lower trading fees, and a floor sweeping functionality. In response to these developments, OpenSea said it was also dropping protocol fees, and creator royalties would be set at 0.5%. Blur has also introduced a policy that they only enforce full creator royalties on collections that block trading on Opensea. This also entitles creators to “Season 2” rewards on Blur. Meanwhile, Magic Eden, a competitor who made their name on Solana, laid off 22 employees.
What does this mean for the industry going forward?
Protocol fees will converge to zero, and NFT Platforms will have to brainstorm other monetization methods like consulting. As for creator royalties, they won’t stay high for long.
General News:
Paxos has come out with a statement that they vigoruously disagree with the SEC’s decision to label the BUSD stablecoin as a security. Since the SEC’s notice, we have seen roughly $700m of BUSD redeemed. Creations stop on Tuesday. Despite rumors on Twitter, Circle and Tether have not been served notice by the SEC.
SBF used a VPN to watch the superbowl (he had an international subscription from his days in the Bahamas)
The names of SBF’s bond cosigners have been released. Larry Kramer, the former dean of Stanford Law School, and Andreas Paepcke a senior research scientist at Stanford
Polygon announced the planned launch of their zkEVM on March 27
Flashbots team releases MEV-Share - a protocol that allows you to submit transactions to builders, and earn a rebate from them for the MEV that they extract.
A pro Fortnite gamer known as Mongraal won first place in Yuga’s Dookey Dash game. The NFT he won is on sale for 2,222 ETH (around $3.7m). It’s listed onn Opensea, not Blur.
The SEC has proposed a new rule that requires additional requirements for crypto firms to hold customer assets. This may cause a headache for US based exchanges.
Gate.io is partnering with Copper.co to allow you to trade whilst maintaining independent custody of funds
Tencent got cold feet on their plans to enter the VR hardware space
Funding News:
Monad Labs raised $19m from Dragonfly and a few notable angels including Naval Ravikant, Cobie and Hasu. They are building a blockchain that is a fork of the EVM. The team claims they can get to 10,000 TPS and that they will release testnet and mainnet in 2023.
Cysic raised $6m, led by Polychain, to build specialized ZK hardware. They have developed a FPGA prototype of multi-scalar multiplication (MSM)