Cryptonite May 2022

When the lunatics run the asylum

Its time for Cryptonite - our monthly roundup of all things crypto - with Tejaswi Nadahalli.

You can follow Tejaswi on twitter @nadahalli and he blogs at tejaswin.com

Show Notes

What Are Algorithmic Stablecoins? (decrypt)

The Terra Triforce: Rise of the Lunatics (thetie)

Alex Krüger @krugermacro

The Luna/UST collapse must be the most negative crash in the history of crypto. Due to the sheer size of wealth destruction ($40B permanently gone), widespread holder base, perception of safety, top-tier exchange listings, and how much of the establishment vocally supported Luna.

The operators of the collapsed Terra stablecoin ($UST) last week allowed selected holders of the dollar token to cash out at close to 100 cents in the dollar. (newmoneyreview)

algorithmic stablecoins are fundamentally flawed because they rely on three factors which history has shown to be impossible to control. First, they require a support level of demand for operational stability. Second, they rely on independent actors with market incentives to perform price-stabilizing arbitrage. Finally, they require reliable price information at all times. None of these factors are certain, and all of them have proven to be historically tenuous in the context of financial crises or periods of extreme volatility.

Dr. Ryan Clements, wakeforestlawreview

Quentin Vandeweyer @QuentinVandewe2

We spent the last year figuring out what algorithmic stablecoins are and came up with a dynamic model that might help us understand what’s going on with #Terra_Luna . Here are our main takeaways. THREAD.

Cryptocurrency Tether is fined $41 million for lying about reserves (fortune)

Anyone Seen Tether’s Billions? (bloomberg)

Tether Blacklists Ethereum Address Linked to Multichain Hack (coindesk)

What is Dai? (firi)

Coinbase CEO says UPI payments suspended due to 'informal pressure' from RBI (livemint)

NPCI caps market share for UPI apps at 30% of overall payment volumes (economictimes)

Argentina Inflation Surged to 20-Year High In March. Consumer prices in Argentina rose 6.7% m/m in March; 55.1% y/y (bloomberg)

Seth Green's Bored Ape Was stolen. Now He Can't Make His NFT Show. (mashable)

What are the copyright implications of NFTs? (reuters)

Joe Pompliano @JoePompliano

A company that is famous for selling JPEGs of Bored Apes on the internet raised $320 million this weekend by selling 55,000 parcels of virtual land in their metaverse & people paid with a currency called ApeCoin. That legitimately would have sounded insane just a few years ago.

How Bored Ape Yacht Club Broke Ethereum (cnet)

David Marcus' Lightspark is a big bet on bitcoin (protocol)

Links

FatMan @FatManTerra

Yikes. @stablegains took USDC and USD via wire from customers promising them 15%, put it all into Anchor without telling them, and skimmed 4% off the top. They have now changed the denominations in their app from USD to UST and are nuking the landing page & old terms. (1/2)

DeFi Made Here @DeFi_Made_Here

Consequences outside #terra after $luna collapse. Thread 🧵

Lagarde Says Crypto Is ‘Worth Nothing’ and Should Be Regulated (bloomberg)

Crypto Meltdown Exposes Hollowness of Its Libertarian Promise (wsj)

Coinbase and the Insider Exchange Dump (swanbitcoin)

shivsak @shivsakhuja

"Where is the money coming from?" The MOST important question in DeFi that most investors don't ask.. 👇 🧵 [1/x]

MartiniRita @TheMartinirita

NGMI: not gonna make it Stable coins.. UST broke its peg twice. If you think crypto is immune fm the economics of currency and finance, then NGMI if you think this hasn't happened before, your NGMI AND you've fallen for the oldest joke on wall street How crypto go boom1/

Memes of the Month

CryptoChimp @Cryptanzee

Crypto Doomsday

𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 𝐌𝐚𝐫𝐤𝐞𝐭 𝐇𝐲𝐩𝐞 @EffMktHype

El Risitas tells us why a certain corner of the crypto market is saying "algofuckmyself"