Yuga Lab’s $300 million Otherside land sale triggered network chaos and backlash
1 May 2022
Image: Yuga Labs
On 1 May, Yuga Labs, the creator of the famous Bored Apes Yacht Club (BAYC) NFT collection, launched the largest NFT mint in history. It raked in $320 million from its Otherside (Otherdeed) virtual land sale. However, the highly anticipated launch wasn’t without controversy.
55,000 land parcels were available for public purchase at 305 APE each, which means that each Otherdeed NFT cost around $5,800 given that Apecoin’s price was approximately $19 at the time of mint. Although only wallets that have gone through the Know Your Customer (KYC) process were eligible to mint, the demand far exceeded supply. This resulted in dramatic consequences across the entire Ethereum blockchain.
The proof-of-work (PoW) network was immediately clogged up as buyers cranked gas limits to over 6,000 gwei (100 to 200 times more than average) to “cut in line” and secure their NFTs before it sells out. While some claimed to only have paid a couple hundred dollars in gas fees, others reported paying over $4,000 for a single transaction.
Unsurprisingly, Yuga Labs was heavily criticised for the chaotic mint that burned 55,843 Ethereum (approximately $157 million) in the process. To rectify the matter, it has since refunded a total of 90.57 ETH (around $265,000) for the failed transactions.
Google’s cloud group forms Web3 team to capitalise on crypto boom
6 May 2022
Image: Getty Images
Earlier this month, Google Cloud Platform (GCP) announced its plans to form an in-house team for Web3 tools and back-end services catering to the needs of blockchain developers. This new development comes as part of the tech giant’s recognition that crypto will ultimately see mass levels of adoption.
Google Cloud vice president Amit Zavery reportedly told his team in an email on 6 May that the main idea is to make the Google Cloud Platform the first choice for developers in the field.
“While the world is still early in its embrace of Web3, it is a market that is already demonstrating tremendous potential with many customers asking us to increase our support for Web3 and crypto-related technologies,” he wrote.
How Terra flatlined in a matter of days
Unless you’ve been living under a rock, you would have heard about one of the biggest failures in crypto that wiped out $60 billion in value, along with its investors’ life savings.
What is Terra?
Terra network is a blockchain-based project developed by Singapore-registered firm Terraform Labs. The aim of the Terra blockchain is to create “algorithmic stablecoins”, which are tokens designed to combine the decentralised freedom of cryptocurrencies with the stability of fiat money.
To achieve this, the blockchain utilises a dual token system – TerraUSD (UST) and LUNA. LUNA, the native token of the Terra network, serves as a variable counterweight to UST and absorbs its volatility.
But unbeknown to its supporters – and proving its critics right – the Terra ecosystem was a mere “confidence game” that was doomed to fail.
Here’s a quick overview of what went down:
- 7 May: First major signs of capital flight from UST occurred when 85 million UST was swapped for 84.5 million USDC.
- 8 May: UST lost its dollar peg and dropped to a low of $0.985, caused by a series of large dumps of UST on Terra’s high yield lending protocol Anchor and stablecoin exchange protocol Curve.
- 9 May: Luna Foundation Guard (LFG) issued $1.5 billion worth of loans in an attempt to stabilise the token – 50% in BTC to market makers and another 50% in UST for BTC buyback after volatility subsides.
- 9 May: Deposits on the Anchor protocol plunge below $9 billion from $14 billion after UST struggles to recover to $1, eventually losing its peg for a second time to as low as $0.35. LUNA, which has been minted in large volumes to absorb the shock, tanked 52% and hit its lowest point since September 2020 to around $30. LUNA’s all-time high was $119.18 on 5 April.
- 11 May: 58% of traders place futures bets on higher LUNA prices despite shocking dip, leading to $63 million in liquidations as LUNA free fall to $2.13. Do Kwon, the founder and CEO of Terraform Labs, is also revealed to be one of the pseudonymous co-founders behind the failed algorithmic stablecoin Basis Cash.
- 13 May: LUNA finally hit $0.01, diminishing any hopes of recovery for Terra’s ecosystem.
- 14 May: Binance and several other exchanges pull the plug on LUNA and UST trading pairs.
- 25 May: 65.50% of governance voters in favor of Terraform Labs CEO Do Kwon’s “Terra Ecosystem Revival Plan 2” to create a new blockchain. The old network and cryptocurrency will be renamed Terra Classic and LUNA Classic (LUNC).
- 26 May: Binance and FTX announced that they will support the new Terra 2.0 token LUNA airdrop.
- 27 May: Just 10 hours after its debut, LUNA reboot plummets over 70% from its initial value. Talk about flogging a dead horse.
After Terra’s spectacular collapse, retail investors were sent into a frenzy, triggering a short-lived stablecoin panic and worsened crypto markets.
The most anticipated upgrade in blockchain history finally has a date. It’s slated for August, as revealed by Ethereum co-founder Vitalik Buterin when he spoke at a developer summit in Shanghai on 20 May.
What exactly is “The Merge”? Previously referred to as Ethereum 2.0, the merge is the long-awaited upgrade to the Ethereum blockchain that will shift the major blockchain from a proof-of-work (PoW) mechanism to proof-of-stake (PoS) model.
This change has been envisioned as a way to eliminate concerns about Ethereum’s environmental impact. It also puts an end to many of its current usability problems, such as slow transaction speeds and high gas fees.
But this transition is not without challenges. To compel validators to move over to PoS, the developers have coded a “difficulty bomb” that will be dropped into Ethereum and its testnets to intentionally slow down the network. Simply put, this increased difficulty in the mining algorithm will eventually make mining unprofitable and impossible.
Ethereum core developer Preston Van Loon said that the merge on Ropsten – one of Ethereum’s several testnets – is scheduled on 8 June. The real merge will happen on the main Ethereum chain sometime in August (but it could be delayed again as it did several times before).
If all goes well, the merge could renew faith in Ethereum and the broader crypto industry.
Robinhood to launch its own Web3 crypto wallet designed for DeFi traders and NFT buyers
23 May 2022
Investing app Robinhood reaches for growth beyond stock trading as it announced plans to roll out non-custodial crypto wallets focused on decentralised finance (DeFi) and NFTs by the end of 2022.
CEO Vlad Tenev teased the new standalone app at the Permissionless DeFi conference in Florida on 23 May. The new product will enable users to lend, stake, yield farm, purchase NFTs and even access a wide array of tokens currently unavailable on Robinhood. These expanded features are intended for “advanced use cases” that do not exist in Robinhood’s earlier wallet launched earlier last month.
Known for its comissionless-trading, Robinhood intends to bring its trademark approach to NFTs and DeFi, adding that users of its multichain wallet will be able to enjoy zero network fees.
Robinhood says that the beta version for the new wallet is expected to drop this summer for a select group of users before being rolled out internationally. Keep your eyes peeled.
Coinbase becomes the first crypto company to enter Fortune 500, ranking 437th
25 May 2022
Coinbase (COIN) has made history by being the first crypto firm to be ranked on Fortune 500, a prestigious list for the biggest US companies by revenue. The NASDAQ-listed crypto exchange posted revenues of over $7.8 billion in fiscal 2021, placing it 437th on the 2022 Fortune 500 list.
Apart from this impressive feat, Coinbase is also the first to take out a Bitcoin-backed loan from Goldman Sachs, paving the way for others to follow.
But amid the recent market downturn, Coinbase shares hit its lowest mark at $53.72 on 11 May, which is 80% lower than its all-time high of $342. This spurred its co-founder Fred Ehrsam to step in and buy the dip, purchasing over 1 million shares of COIN worth roughly $75 million through his venture capital firm Paradigm, where he serves as a managing partner.
At the time of writing (30 May 2022), COIN is trading at $75.32.