Monday, May 16, 2022

LUNA meltdown sparks theories and told-you-sos from crypto community

Some of you saw it coming, some of you still can’t believe it's real. Was the “most significant collapse in crypto history” an attack?

No matter how bad your day is going, spare a thought for LUNA investors on Wednesday. Terraform Labs, headed by CEO Do Kwon — No. 18 on Cointelegraph's Top 100 — has lost billions of dollars for its investors.

Terra’s coins came crashing down as Kwon's brainchild LUNA sunk over 97% from highs, while the stablecoin TerraUSD (UST) fell 75% lower than its intended dollar parity. At one point, LUNA’s price tread lower than UST.

There are real consequences to the coins’ failures. On the r/Terraluna subreddit, suicide hotlines have been pinned. The subreddit is indeed a disturbing read as the LUNA crisis unfurls.

So, how did it happen? How did an ecosystem led by a braggadocious personality experience one of crypto’s biggest crashes?

What was initially considered a FUD (fear, uncertainty and doubt) attack on Luna has evolved into something far more conspiratorial and insidious. Among the most popular theories is an alleged George Soros-inspired “attack” on the Terra ecosystem, in which the buyer made off with over $800 million.

Ransu Salovaara, CEO at Likvidi, echoed the theory, explaining to Cointelegraph that “Some parties picked UST’s algorithm peg as a market manipulation target and borrowed lots of Bitcoin to execute this, what some call ‘Soros style,’ attack on UST.”

“It’s been estimated that the short-seller ‘attacker’ made about $800 million on this event.”

The “attack” caught mainstream attention, with United States Treasury Secretary Janet Yellen bringing up algorithmic stablecoins on Tuesday and highlighting the “risk” they pose during a Senate Banking Committee meeting. Economist Frances Coppola concurred that the UST debacle was an attack.

Ran NeuNer, host of CNBC’s Crypto Trader and a “good friend” of Kwon, sent the rumor mill into hyperdrive with his suggestion that American market maker Citadel could be behind the “attack.” Charles Hoskinson, CEO of IOHK, also said the “word on the street” is that it may be Citadel.

While billionaire Citadel Securities founder Ken Griffin has laid bare his dislike for the crypto industry— comparing the trillion-dollar market to abstract art — the suggestion that Citadel would attack UST remains speculation. Inevitably, Crypto Twitter accused Neuner of trying to protect his significant yet fast-evaporating LUNA bags.

Meanwhile, Larry Cermack, a crypto researcher, suggested that over $1 billion is inbound to shore up and fight the Luna Foundation Guard wildfire. According to Cermack, venture capital would be provided by Celsius, Jump and Alameda, among others.

Theories aside, for many crypto observers, researchers and believers, the UST car crash was a) foreseeable and b) one of the most significant crypto deaths in history.

For Tree of Alpha, the white-hat hacker who discovered a crisis-level flaw in the Coinbase API, LUNA's demise is “by far, the biggest Ponzi death spiral collapse in the history of Crypto, by a factor of 16.” Nic Carter of Castle Ventures made the same call, describing it as “the most significant collapse in the history of the crypto space.”

Tree of Alpha compared LUNA to the confirmed Ponzi scheme Bitconnect, a $2.4 billion fraud case involving highly memed frontman Carlos Matos that went down in crypto infamy.

Cory Klippsten, CEO of Swan Bitcoin, who had been banging the Bitcoin maximalist drum (i.e, avoid shitcoins at all costs) since the inception of UST, quickly memed “BitKwonnect” into existence.

Lyn Alden, No. 100 on Cointelegraph’s Top 100, had also previously warned of UST’s lurking issues. In an investor letter, Alden described the accompanying Bitcoin “selling pressure” that would flood the market with tens of thousands of coins if the UST peg crumbled. She was right: All of the events she mentions occurred over the past 48 hours.

Perhaps the ultimate slam dunk “I did warn you!” was from John Carvalho, CEO of Synonym, who suggested that UST felt like “a huge trap.”


In crypto, we are in a period of disbelief.

Look about you: people on the left and right are abandoning crypto because "they don't believe in it anymore," but the real reason is that they are no longer making money from it. They wouldn't dare to get out if we were in a bull market with green candles all day, every day, but if we were in a bear market, they'd be dancing all day and yelling crypto to the moon.

Many people have lately said their goodbyes on this sub, and I believe these events signal a likely market bottom.

The basics of cryptocurrency have remained constant: bitcoin is still rare, Ethereum is still the most popular smart contract platform, NFTs from BAYC and High Sloth Society are selling like hotcakes, and other advancements have remained unchanged.

If you're a developer, you'll undoubtedly appreciate having this time to build a project, polish it, and gain funders and members.

If you're a regular investor, you probably don't enjoy staring at the color red every day.

Right now, most retail newbies have left, leaving only me, you, and the whales.

Thank you for your time. Have a wonderful day!


Cardano Rumor Rundown May 16, 2022

Hey Everyone!

Let's go...

Newly covered today:

  1. It looks like Terra may be moving toward a plan where “validators should reset the network ownership.” Is that the type of crypto that most of us signed up for? https://agora.terra.money/t/terra-ecosystem-revival-plan/8701
  2. Even Forbes realizes that the EVM may not be the best virtual machine in the industry. https://www.forbes.com/sites/lawrencewintermeyer/2022/05/12/will-ethereums-virtual-machine-eat-itself/
  3. Copi Cafe Episode 7 is out. https://www.youtube.com/watch?v=s1zSbpzY40w
  4. Here are details on the Liqwid Aquafarmers NFT mint that will be going down at 12:00 PM UTC (8:00 AM EST) on Tuesday, May 17th. The medium article describes a 12 hour window for whitelisted addresses. https://liqwid-finance.medium.com/liqwid-aquafarmers-nfts-mint-date-and-time-c347b05b288e
  5. Daedalus 4.10.0 is out. https://iohk.zendesk.com/hc/en-us/articles/6515425656089
  6. Charles with some very incisive commentary on the way Cardano funds development vs. the rest of crypto. https://twitter.com/IOHK_Charles/status/1525651090376736768

Previously Covered but still interesting:

  1. Catalyst has launched a new African Incubator along with iceaddis called Ariob. https://twitter.com/InputOutputHK/status/1511691446910427139 https://iohk.io/en/blog/posts/2022/04/05/project-catalyst-launches-incubator-for-africa/
  2. If you don’t think our biggest competitor is broken by fees, check out this report of $26 million spent on gas fees in an offering that only raised $8 million. Someone’s making money, but they’re called miners. https://twitter.com/cr0ssETH/status/1511446814196572161
  3. Maladex makes a good point about liquidity in DeFi. https://twitter.com/CardanoMaladex/status/1511811031470952466The future is not going to be 2D. Here is (probably) the first metaverse purchase of a SpaceBudz NFT. https://twitter.com/poly_peer_party/status/1511789839447904266
  4. MinSwap and COTI are looking at how best to integrate Djed into Minswap. https://twitter.com/MinswapDEX/status/1512052790625026052
  5. Here are some questions answered by Ross, Pavia Community Manager. https://www.youtube.com/watch?v=Zc9A4tREvkI
  6. Shocker! Reports of more problems from our most problem ridden competitor.. https://twitter.com/Katsumoto87/status/1512002841501655044
  7. If banks are involved with crypto, they now need to notify the FDIC. https://www.fdic.gov/news/financial-institution-letters/2022/fil22016.html
  8. MuesliSwap is going through a redesign. https://twitter.com/MuesliSwapTeam/status/1512090675021447169
  9. Here’s an excellent thread from Sooraj that explains in very easy-to-understand terms why Cardano’s eUTxO model is superior to ETH’s account balance model. Even Ben Goertzel had to comment on this thread. https://twitter.com/Soorajksaju2/status/1512886236066762762 https://twitter.com/bengoertzel/status/1513177850286813185
  10. You might as well follow that up with his earlier threads on a) why UniSwap v.3 hasn’t solved impermanent loss but the answer may lie in Cardano’s eUTxO architecture; and b) why AMMs are inferior to order book DEXs. https://twitter.com/Soorajksaju2/status/1512110589459546120 https://twitter.com/Soorajksaju2/status/1511819727475294211
  11. The Agora Governance Module from MLabs, Liqwid, and ADAO is now open source. https://twitter.com/liqwidfinance/status/1512414100273471497
  12. Wingriders hints at Ledger compatibility in their DEX. https://twitter.com/wingriderscom/status/1513242395101515778
  13. IOHK introduces the Delegate Representatives concept for Catalyst voting. This seems to embrace the idea that the best form of government is “a republic…if you can keep it.” https://iohk.io/en/blog/posts/2022/04/11/introducing-the-concept-of-delegate-representatives-dreps/
  14. Curious how to pronounce names in Cardano? Here you go. https://twitter.com/AnthonyCardano/status/1513479117483778048
  15. SundaeSwap announces some quality of life improvements for its users. https://twitter.com/SundaeSwap/status/1513605929907933198
  16. WingRiders has already announced details on its Yield Farming that it says will be live on day 1. https://medium.com/@wingriderscom/wingriders-yield-farming-will-be-live-from-day-one-of-mainnet-launch-769095f7ef91
  17. It’s looking like the Bankless podcast wants to have Charles on and he indicated he would do it. https://twitter.com/IOHK_Charles/status/1513621050940170242
  18. WingRiders is live on mainnet and there are stablecoins! https://twitter.com/wingriderscom/status/1513865034115739652 https://twitter.com/wingriderscom/status/1513788413631152130
  19. Soon there will be a list of verified Pavia Asset (PCA) creators. https://twitter.com/Pavia_io/status/1513835187343405058
  20. The MuesliSwap Milk token is now live on the Milkomeda version of the MuesliSwap DEX. https://twitter.com/MuesliSwapTeam/status/1513921544812126210
  21. IOHK wants your input on what should be included in Cardano 360. https://twitter.com/InputOutputHK/status/1513914342642790405
  22. It looks like the Chrome Web Store approval of the new version of the Eternl Wallet has fixed the Ledger compatibility issue that recently cropped up. https://twitter.com/eternlwallet/status/1513789563755503619
  23. Mainstream media is really pulling out all the stops, now labeling crypto people as study-proven “psychopaths”. https://nypost.com/2022/04/12/bitcoin-fans-are-psychopaths-who-dont-care-about-anyone-study-shows/
  24. IOHK gave us a big rundown of all the news from the last ten days (4.12.22). https://twitter.com/InputOutputHK/status/1513951540058411008
  25. It turns out that Pavia land parcel ownership is pretty decentralized. https://twitter.com/Pavia_io/status/1514183930605408266
  26. The ETH Merge to proof-of-stake is delayed again! No firm date has been established. https://twitter.com/TimBeiko/status/1514010098145759232
  27. BlackRock will be the primary asset manager of USDC reserves. It looks like the institutions are fully here in crypto. https://www.coindesk.com/business/2022/04/12/usdc-issuer-circle-raises-400m/
  28. Here’s a very good article from IOHK explaining reference inputs and reference scripts that will be implemented at the Vasil hardfork combinator event in June 2022. https://iohk.io/en/blog/posts/2022/04/13/boosting-cardano-s-throughput-with-script-referencing/
  29. Here’s a great thread on what happens when you have one-way public pressure on a liquidity pool where one of the assets is an otherwise unavailable wrapped stablecoin. https://twitter.com/Doctor__A__/status/1514230061859319815
  30. People are sounding the alarm about two new projects that have launched on Milkomeda. https://twitter.com/NicoArqueros/status/1514603103860903939
  31. The Vasil Hardfork Combinator event is scheduled for June 29th and is on track. https://twitter.com/InputOutputHK/status/1514637134040346628
  32. The April Mid-Month Update is out and available! https://www.youtube.com/watch?v=B0tojqvMgB0
  33. Alessandro (of SpaceBudz, Berry, & Nami) releases Lucid, a Javascript framework to handle Plutus off-chain code. https://twitter.com/berry_ales/status/1514728197438545937
  34. Charles offers to help Elon Musk build a decentralized twitter if Elon’s offer to acquire the company and take it private is not successful. https://twitter.com/IOHK_Charles/status/1514707087128997890
  35. Robbery Forest Heist Alert: Reports coming in that BeanStalk Farms stablecoin protocol was exploited for something like $80 Million. https://twitter.com/BeanstalkFarms/status/1515700678454390785 https://twitter.com/WatcherGuru/status/1515689590841040899 https://twitter.com/Rightsideonly/status/1515692515286224902
  36. The word “Solunavax” is now in Urban Dictionary. https://www.urbandictionary.com/define.php?term=solunavax
  37. Our community is so strong, not even Mt. Everest is safe from our reach. https://twitter.com/ArthurPrestidge/status/1515317980942405632
  38. The robbers in the Robbery Forest have names. The FBI says North Korea’s Lazarus Group & APT38 hacker teams are behind the Axie Infinity theft. https://gizmodo.com/fbi-says-north-korea-behind-biggest-crypto-theft-in-his-1848797691
  39. Very harsh technical and other criticism incoming for Cardano competitor Solana. https://twitter.com/Justin_Bons/status/1514646388688232456
  40. Looks like info might come this week about the Cardano Summit NFTs? https://twitter.com/IOHK_Josh/status/1515462695537246208
  41. Take note if using an EVM sidechain of Cardano: report of a crazy Metamask vulnerability if you enable iCloud backup of app data on an Apple product. https://twitter.com/Serpent/status/1515545812423839745
  42. The wider crypto space is learning that Cardano added 100k wallets in the last month. https://twitter.com/WatcherGuru/status/1516095660424155137
  43. The AGIX ERC-20 converter is now live! https://twitter.com/singularity_net/status/1516069469591908361
  44. Singularity.net is building a metaverse virtual world (Sophiaverse.ai) where AI characters embodied in humanoid avatars will interact with, teach, and learn from players. This could end up being wildly interesting. https://www.sophiaverse.ai/ https://www.youtube.com/watch?v=Kjh-MXd4xnw
  45. Paribus announces it will build an HQ in Pavia. https://twitter.com/paribus_io/status/1512443022801346583
  46. Apparently Indigo Step #3 will close out on Apr 19, 2022. https://twitter.com/Indigo_protocol/status/1516072942395928579
  47. MuesliSwap Mainnet v.2 is here! Now with partial order matching! https://medium.com/@muesliswap/introducing-muesliswap-v2-the-next-generation-of-cardanos-most-popular-orderbook-dex-6b1fc6af64b1
  48. Cardano Ledger App…now with smart contract compatibility. https://twitter.com/Ledger_Support/status/1518927545751773184
  49. The dominos are starting to fall. Now the Central African Republic is adopting crypto as legal tender. https://news.yahoo.com/central-african-republic-adopts-bitcoin-104407031.html
  50. Binance has recovered a tiny portion of the 600 million USD stolen from the Axie Infinity Ronin Bridge. https://cointelegraph.com/news/binance-recovers-5-8m-in-funds-connected-to-ronin-bridge-exploit
  51. Artifct has released info on its Moon metaverse project. https://artifct.app/docs/MoonFlightPlan.pdf
  52. Great thread on the trilogues for the new EU crypto AML rules. https://twitter.com/paddi_hansen/status/1519609822823403521
  53. The Cardano Summit NFTs are finally here (as of Apr 25 2022). https://blog.terravirtua.io/partnership-news/your-guide-to-cardano-summit-nfts/
  54. The April Cardano 360 is ready and waiting for you. https://www.youtube.com/watch?v=b4x5OIy4shU
  55. The biggest NFT collection in the world wants to migrate away from ETH after its metaverse land mint cost $177 million in gas fees. https://twitter.com/yugalabs/status/1520612362986078208
  56. Shocker! Solana is once again “halted”. https://twitter.com/SolanaStatus/status/1520508697100926977
  57. The latest Pavia developer update is out. The builder tool is in development and set for Q2 release. Lots of features and updates revealed including chat features. https://www.youtube.com/watch?v=whnKHNq7f5A
  58. There is a new CopiCafe episode from Cornucopias available. Three will be five parcel sizes. The smallest will be roughly the size of an NBA basketball court (16m x24m). https://www.youtube.com/watch?v=HVnzb8IT3lk
  59. ADA Realm has released a mockup of their avatar and parcel editor. https://twitter.com/AdaRealm/status/1520493365216919553
  60. JPG Store’s new smart contract is open source. They’re offering a $50k bug bounty. https://twitter.com/jpgstoreNFT/status/1520835206659289089
  61. The wider crypto space just noticed that Cardano has done over 100k transactions per day for half a month. https://twitter.com/WatcherGuru/status/1521071194786705408
  62. We are very early in Cardano. The CEO & Founder of eToro just talked to Charles in person and then tweeted with excitement about a few things including NFTs “coming” to Cardano. https://twitter.com/yoniassia/status/1520954005521715207
  63. Genius Yield has revealed their public sale model. https://twitter.com/GeniusyieldO/status/1521215710923563009
  64. Charles offers up digital identity (DID) to Elon Musk as a solution he needs for Twitter. https://twitter.com/IOHK_Charles/status/1521152995756363776
  65. The Clay Nation metaverse (“Clayverse”) map has been revealed. https://www.claynation.io/clayverse
  66. EU Commissioner Mairead McGuinness calls for a joint EU-US led international approach to crypto regulation. https://watcher.guru/news/eu-commissioner-is-calling-for-global-regulators-to-create-a-unified-crypto-regulation
  67. The Liqwid AquaFarmers NFT whitelist is now public and ready for you to check your wallet. Use your stake key (instructions in the thread to find your stake key if you don’t know how). https://twitter.com/liqwidfinance/status/1521166352559583237
  68. MuesliSwap has gone live with wrapped Bitcoin. https://twitter.com/MuesliSwapTeam/status/1521590290859151360
  69. Charles had a great spot on Fox Business. https://twitter.com/IOHK_Charles/status/1521739002214199296
  70. Djed is now live on testnet. https://medium.com/cotinetwork/djed-public-testnet-is-live-b0b0b13552e0 https://twitter.com/COTInetwork/status/1521804376725233664
  71. The SEC is nearly doubling the number of attorneys it has on crypto enforcement. https://www.cnbc.com/2022/05/03/sec-adds-to-cryptocurrency-regulation-staff.html
  72. May 4th was the birthday of Hal Finney who may have been Satoshi.I will try to remember to pour out a little whiskey for him each year until we can bring him back via his cryopreserved remains so that he can reclaim his bitcoin hoard. https://en.wikipedia.org/wiki/Hal_Finney_(computer_scientist)) https://twitter.com/pete_rizzo_/status/1521791809713754113
  73. The Federal Reserve has elevated the interest rate by 50 basis points. This half percentage point increase is the largest hike in 22 years (since May 2000) https://www.nytimes.com/2022/05/04/business/economy/fed-rate-decision-inflation.html
  74. The Cornucopias land sale will involve a tiered whitelist with tiers for Discord membership and NFT holdings. NFT holders will need to verify their ownership according to the directions provided. https://twitter.com/CornucopiasGame/status/1521916326465392641
  75. Pavia will be airdropping PAVs soon and they’ve provided a small FAQ. https://twitter.com/Pavia_io/status/1521851228531134467 https://twitter.com/PaviaRoss/status/1521872255902314496?s=20&t=CferRuF0l936gpQWHcd1rg
  76. Gary Vaynerchuk is now telling newbs to buy an NFT on Cardano or Solana because ETH gas fees are too high. https://twitter.com/TangerineADA/status/1521978950649581570
  77. Coinbase NFT beta is now open. https://twitter.com/coinbase/status/1521888126934781954
  78. Now wrapped ETH is available on muesliswap mainnet. https://twitter.com/MuesliSwapTeam/status/1521917354569048068
  79. A very interesting thread on ETH Beacon Chain centralization. https://twitter.com/dagaffer101/status/1523194663473135616
  80. There is now a dApp section in Eternl wallet. This is not just a button to connect to dApps. It actually shows you dApps you can use. https://twitter.com/eternlwallet/status/1522639247701942272
  81. Tony Rose, IOG Head of Product–Digital Identity, recently testified before the California State Legislature in relation to California students using digital identity. https://mobile.twitter.com/StakeWithPride/status/1523173974456168450 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB1190
  82. There is obviously still a huge information asymmetry in crypto in relation to Cardano. Even a well known crypto influencer was recently seen aggressively claiming that Cardano had no DEXs when we have: MuesliSwap, SundaeSwap, MinSwap, WingRiders, and others all alive and functioning well. https://mobile.twitter.com/Flat_Mars_Ltd/status/1522400420315815937
  83. The Cornucopias podcast, CopiCafe Ep. 6 is now out and available. https://www.youtube.com/watch?v=KuMRgvVDPW8
  84. COTI and Djed have partnered with GADA Launchpad. https://twitter.com/COTInetwork/status/1523620203422437376
  85. The winner has authored a thread on how the Artifct Moon Treasure Hunt was solved. https://twitter.com/AshXlandZ/status/1523403686810353666
  86. There is a new Africa update with John O’Connor available. https://www.youtube.com/watch?v=X1cKW1RhI2E
  87. As they post under #ponzi, many members of the Solunavax space seem to be collectively accepting that while they thought TerraUSD was pegged, it was in fact them. https://twitter.com/jonwu_/status/1523793482850050048 https://twitter.com/stablekwon/status/1523532474860539905 https://assets.website-files.com/611153e7af981472d8da199c/618b02d13e938ae1f8ad1e45_Terra_White_paper.pdf https://twitter.com/IOHK_Charles/status/1523876312498192386 https://twitter.com/ercwl/status/1523802943362895872 https://twitter.com/el33th4xor/status/1523968918934728709
  88. MuesliSwap held an AMA on Reddit and the questions and answers have been compiled on Medium. https://medium.com/@muesliswap/muesliswap-reddit-ama-06-05-2022-69097df389aa
  89. Liqwid gives us a little teaser of the AquaFarmer NFTS. https://twitter.com/liqwidfinance/status/1524204829110906880/photo/1
  90. Yellen is citing the Luna Terra fiasco and calling for stablecoin regulation by the end of the year. https://techcrunch.com/2022/05/10/us-treasury-secretary-janet-yellen-pushes-for-stablecoin-regulation-by-end-of-year/
  91. The Indigo Protocol private testnet is now live. https://twitter.com/Indigo_protocol/status/1524108224026324993?s=20&t=mR-Tqs9xvh1aDFysTiMzwg
  92. Here’s an illustration from Pavia as to the size of the Pavia Plaza. Turns out it’s big. https://twitter.com/Pavia_io/status/1524296117768368128/photo/1
  93. Charles had a few things to say about the events of the last few days. https://www.youtube.com/watch?v=pNH_PvkVN74
  94. Here’s a World Mobile video showing an air node installation. https://twitter.com/WorldMobileTeam/status/1524042009970888705
  95. Unlike UST, the Ergo stablecoin, SigUSD, has maintained it’s peg nicely since establishment. SigUSD is based on the AgeUSD architecture just like Djed. https://twitter.com/ergoplatformorg/status/1524302368241819657
  96. Here is the latest response from Stable Kwon. Doesn’t seem like a terribly promising plan. https://twitter.com/stablekwon/status/1524331171189956609
  97. Both Blackrock & Citadel have denied the rumors they were involved in Crashing UST. https://watcher.guru/news/blackrock-and-citadel-have-denied-trading-with-terras-stablecoin-ust
  98. Mainstream media is reporting that Charles doesn’t think we’ll get comprehensive crypto regulation this year since there is not enough time politically before mid-term elections to accomplish the task. This would push it to 2025. https://www.foxbusiness.com/technology/cardano-founder-sees-comprehensive-cryptocurrency-legislation-pushed-2025
  99. IOG releases a new paper on P2P. https://eprint.iacr.org/2022/541/20220510:081002 https://twitter.com/IOHK_Charles/status/1524587529743257601
  100. Here’s a thread on Djed asking some interesting questions. https://twitter.com/MatthewPlomin/status/1524386978220974080
  101. ADA Handle reports it has partnered with Cardano Mixer which is a transaction privacy protocol. https://twitter.com/adahandle/status/1524088554392932352
  102. Meanwhile Cardano developers are just grinding away. Watch the code forges glowing red hot here. https://cardanoupdates.com/
  103. An important question has surfaced as a result of the revelation that UST may not be the first stablecoin from its creator. https://twitter.com/DeansEpoch/status/1524495566163660800

~Army of Spies