😬 Uh-oh! Tron’s Stablecoin USDD Slips its Peg as TRX Tumbles
Hello Defiers! Here’s what we’re covering today:
Trending in The Defiant
The open economy is taking over the old one. Subscribe to keep up with this revolution. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button below ($15/mo, $150/yr).
🙌 Together with:
Eden Rocket RPC, providing the fastest private transactions on Ethereum (90%+ hashrate). Trade better anywhere on Ethereum with Eden Rocket RPC.
ZetaChain is the first public L1 blockchain that natively connects with any chain and layer including Bitcoin and Dogecoin without wrapping or bridging assets. Dive into the docs to start building the future of multichain.
dYdX Grants is powering the future of dYdX through community grants. Join us to build on top of the largest decentralized perpetuals exchange!
Bancor, the only DeFi trading and yield protocol with Single-Sided Liquidity & 100% Impermanent Loss Protection. A safer, more sustainable way to earn DeFi yields on your favorite tokens - start earning now!
By Samuel Haig
TROUBLE Tron’s algorithmic stablecoin USDD appears to be in trouble despite recent moves from the Tron DAO to overcollateralize the token.
TURMOIL The supposedly stable USDD token lost its peg to the U.S. dollar amid market turmoil. According to CoinGecko, the token is now changing hands for $0.98. TRX also slumped more than 25% in 12 hours from June 13 to June 14, sparking fears the token may be on the verge of its own death spiral.
SOLD OFF USDD is not the only stablecoin to slide below $1 as the markets sold off. Top centralized stablecoins Tether (USDT) and USD Coin (USD Coin) dropped to $0.995 and $0.099 respectively, while leading decentralized stable token DAI oscillated between roughly $0.99 and $1.02 during the market carnage.
Hope for a Short-Term Swoon Dashed as BTC and ETH Return to 2020 Levels
FUNK It happens in every bear market — total capitulation. For months, investors hang on to the hope that the market will shake off a short-term funk and get back to its bullish ways. Then bam! Something happens and the market knows… This is going to be a long-term bummer.
WITHDRAWALS This time that something is called Celsius. And with the news of the CeFi exchange’s decision to suspend withdrawals this week, the crypto market turned a rout into something much worse: another potential nuclear winter.
GONE All the gains Bitcoin and Ether made in the 2020-2021 bull run are gone. Bitcoin, which has dropped more than 7% in the last 24 hours, was trading at $22,400 in mid-morning trading UK time, according to CoinGecko. That’s the same level it was at in mid-December 2020.
RALLY And Ethereum, which has slipped 1% in the last 24 hours, has tumbled to $1,200. Last time it was in that neighborhood was January 2021. Even more jarring, on Monday ETH slipped below its all-time high during the rally of early 2018.
Liqd is an NFT marketplace built to enable the lending and borrowing of blue chip NFTs. The platform enables individuals who hold blue chip NFT assets to unlock liquidity by borrowing against the value of their asset(s).
In turn, Liqd unlocks a peer-to-peer lending opportunity for crypto holding individuals to passively earn interest on their capital, backed by the value of the underlying NFT asset.
In times of volatility and market unrest, people need access to liquidity. Regardless of why this need for liquidity has arisen, you should never be forced to sell your NFTs. The Liqd platform empowers NFT holders by providing an alternative to selling at market price, helping protect a projects floor price.
With ZERO fees for the first month, now is the time to utilise Liqd and get liquidity on your favorite NFT’s.
Sign up for our newsletter for early access and hidden alpha... don't say we didn't warn you - Liqd NFT
By Jason Levin
NEWS Crypto lending platform Celsius has frozen accounts of its 1.7 million users, further undermining trust in the digital assets space on a day with double-digit losses for Bitcoin and Ether and just weeks after the Terra collapse.
WORST TIME Celsius froze withdrawals, transfers, and swaps for their users on Monday citing “extreme market conditions” according to a Medium post. The move comes at the worst time for traders who are looking to manage their portfolios as global markets plunge, including using assets to cover collateralized debt positions before they get liquidated. Now, Celsius clients are stuck during one of the worst market routs we’ve seen this cycle.
PLUNGE In the last 24 hours, Bitcoin has plunged almost 14% and Ethereum 16% as of early Monday in New York, according to CoinGecko. Celsius’s own CEL token has lost 22.48%.
REDEEMED Lido’s stETH, a derivative token representing staked ether, has traded roughly at par with Ether since its inception. The reason was simple: each stETH token represents one staked ETH token and can be redeemed for ETH in the future, after the Ethereum network completes its transition to the proof-of-stake consensus mechanism and withdrawals on that updated network are enabled.
PEG That so-called “peg” broke in dramatic fashion last week, as the value of stETH relative to ETH began to plunge. stETH began trading at about 97 cents to every dollar of ETH in May. Early Friday morning, it fell to 95 cents on the dollar. On Monday morning, it was trading just above 93 cents on the dollar, according to data from Dune Analytics.
FEARS The nosedive in the value of stETH prompted Lido, the protocol that issues it, to quell fears of a broken peg and comparisons to Terra’s failed UST stablecoin.
Players in Arcane Corner of Crypto Raked in Up To 2,000 ETH on June 13
By Samuel Haig
TACTIC While the bear market has wreaked havoc for many traders, there is one group in crypto that is doing just fine. They’re deploying an obscure tactic involving blockchain mechanics that’s paying off handsomely.
VALIDATORS The practice is called Maximal Extractable Value, or MEV, where crypto miners, network validators, and bot operators manipulate the order of blockchain transactions to extract profits through arbitrage. Flashbots, an MEV-focussed research and development organization, estimates more than $600M has been extracted through MEV from November 2020.
AUCTIONS Bert Miller of Flashbots tweeted that June 13 was “probably the most profitable day ever” for Flashbots miners — miners using Flashbots’ tools to compete in MEV auctions. Miller said that between 1,500 to 2,000 ETH was paid out to participating miners across two to three blocks on June 13.
Register for free to attend the DeFiverse Conference 2022 in which cryptocurrency, NFT, Metaverse, and blockchain experts come to share their expertise. Check it out here now:
Guest writer Li Gong says Web3 needs to get its act together on diversity, now.
TORRENT A trickle has become a torrent in crypto venture capital. Despite rapid inflation and a bear market, VC investment in blockchain grew to $10B globally in the first quarter of this year. This marks the largest quarterly sum ever at more than double one year ago.
STAMPEDE And yet, even as investors stampede towards crypto projects, women will not benefit from the funding bonanza. Less than 5% of crypto founders and less than 10% of crypto fund partners are women. And the numbers aren’t improving.
GENDER As one of the few women funding crypto projects, I can tell you that this diversity gap is evident in my day-to-day. For example, out of the roughly 50 DeFi startups that I talk to, just one founder was a woman. This gender skew is now so baked into blockchain — in both funding and founding — it will take many years to undo.
Crypto lender Celsius is producing a series of experiments over the next few months that would test what it would look like for the company to decentralize some of its operations.
The Federal Reserve is likely to discuss making its biggest interest rate increase since 1994 at its meeting this week, as a range of new data suggest that inflation is coming in hotter and proving more stubborn than policymakers had hoped.
We are writing with a very important message for our community. Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts.
Trending in The Defiant
Non-fungible tokens, or NFTs, are so hot right now. Still. In the last 18 months Bored Apes and Mutant Apes and Art Blocks wonders and Space Doodles have come out of nowhere and formed a global market with an estimated $40B traded in 2021.
With Crypto VC Booming It’s High Time to Close the Gender Gap in Web3 A trickle has become a torrent in crypto venture capital. Despite rapid inflation and a bear market, VC investment in blockchain grew to $10B globally in the first quarter of this year. This marks the largest quarterly sum ever at more than double one year ago.
Andreesen Horowitz Keeps Buying Web3 and Crypto It’s a bear market and investors are picky. As many leave the space one institute has been spending nonetheless. In this video we’re taking a look into the projects a16z has been investing into.
🧑💻 ✍️ Stories in The Defiant are written by Owen Fernau, Samuel Haig, Jason Levin, DeFiDad, Aleksandar Gilbert, and yyctrader, and edited by Edward Robinson, yyctrader, and Camila Russo. Videos are produced by Robin Schmidt, Alp Gasimov and Daniel Flynn. Podcast is led by Camila, edited by Alp.
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Subscribers get full access, while free signups get only part of the content.
Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button above ($15/mo, $150/yr).