Web3 Weekly 5/9/2022: Crypto Markets get rekt, Terra's UST de-pegs about 40%, and Coinbase NFT flops
In this week's newsletter, we go over the crypto market crash, Terra's UST depeg, and some potential blackmail towards the Azuki dev.
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gm friends, a lot has happened this week in Web3. Here's some things that just minted👇
- Bloodbath across all crypto and NFT markets
- Algorithmic stablecoin UST de-pegs about 40%
- Coinbase NFT launch flops
- Azuki creator potentially blackmailed
- And more!
Terra's stablecoin UST depegs by 40%
Terra's stablecoin UST is one of the most popular cryptocurrencies. They are known for being the most successful "algorithmic stablecoin". Stablecoins are "pegged" to fiat, and UST tries to keep a 1:1 basis to the US dollar.
UST is algorithmic because code is responsible for achieving price stability and circulating supply by giving traders incentives to maintain the price. Compare this to traditional stablecoins such as Tether which is backed by cash and assets to maintain its equal dollar amount.
Over the weekend, UST depegged slightly to $0.985 from investors selling more than $500M in UST positions on Anchor. At first, Terra brushed off the concerns, but their native token LUNA continued to draw speculation.
Well. After the bloodbath of a market today, UST dropped as low as $0.60. One incentive of UST is that you can trade dollar for dollar with LUNA. If LUNA is at $10 USD, you can get 10 UST for it.
Earlier today, the market capitalization of LUNA fell below UST. The low Simply put, redeeming LUNA for UST was no longer an incentive.
An $18 billion stablecoin is losing its dollar peg with all the magical chaos of algorithmic stables, with a dash of Bitcoin systemic risk drama.
— jonwu.eth (@jonwu_) May 9, 2022
Here's everything you need to know.
The $UST Depeg Thread:
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The instability of the algorithmic stablecoin leads to some concerns about the feasibility of the asset. For now, the Luna Foundation Guard plans on defending the UST peg by collateralizing against Bitcoin Reserves.
Coinbase NFT launch completely flops
Coinbase NFT is finally out for everyone to use! After being in beta for only a select few influencers and users, Coinbase NFT was applauded for its clean UI, ability to comment, and featured as a "social marketplace".
Unfortunately marketplaces need users, and only 150 people made a trade the day Coinbase NFT launched. This is a far cry from the 68 million users that Coinbase had and was suppose to introduce to the NFT market.
For a comparison, the leading NFT marketplace OpenSea does over 100 million dollars in trade volume each day.
So coinbase NFT is live for everyone. No one seems to care…
— 0xBotwin.eth👑🦁🧬 (@0xBotwin) May 4, 2022
Was the Azukis team blackmailed?
If you didn't think a Monday could get any crazier, Zagabond.eth, the creator of the widely-popular and anime-inspired NFT project Azukis, shocked NFT Twitter after announcing that he also founded Phunks. The news led to both Azukis and their secondary collection "Something"/"Beanz" dropping over 30% in floor price.
Phunks were a popular NFT collection that literally flipped the images of CryptoPunks and was minted and sold as a different collection. They received DMCA strikes from Larva Labs themselves and even used it as a marketing tactic.
In the NFT world, creating these low-effort projects that are used primarily to only make money is highly frowned upon. In fact, revealing this type of information would surely damage the reputation of Azukis, a possible top 5 NFT profile picture project. So why did he do this?
Many, along with myself, speculate that Zagabond must have been blackmailed. After all, blockchain data is public and someone must have found the connection.
If you dont think Azuki is about to get fudded hard... not sure what to tell you. And i got big azuki bags lol Clearly the man was blackmailed and force to out his past failed projects. I dont think they were rugs per say but abandoned projects for the next for sure.
— Wizard Of SoHo (@wizardofsoho) May 9, 2022
You can read the "confession" here.
Other Web3 News
- ENS domains have been on fire as there's a large demand for 3-4 digit domains
- Fidelity plans to add Bitcoin to workplace 401ks
- Julian Holguin, the former president of Billboard, was announced as the new Doodles CEO to expand Doodles IP to music, gaming, and entertainment
- Gucci announced that it is going to accept Bitcoin, Dogecoin, and Shiba Inu as a payment method in all US stores by the end of the month
- Americana is selling an NFT chip that will turn real-world luxury items into NFTs
- Elon Musk trolls Bored Ape Yacht Club by changing his Twitter picture and calling it "fungible"
- Starbucks plans to release NFT collection for drinkers
- Instagram will start testing out NFTs this week
- NFT Worlds set a record of 50k monthly active users
- Gary Vee and Voltura from Psychedelics Anonymous held a Twitter Space
If you like learning about Web3, blockchain, NFTs, and tech, subscribe to our free newsletter! We post every Monday, Wednesday, and Friday! And if you haven't yet, follow me on Twitter!