Ahhh I'm Merging!
Your Weekly Crypto Roundup
1. Dev Destroyed his Entire Company with the Wrong Code
Crypto derivative exchanges tend to be centralized, including Binance, FTX, BitMEX etc. Those exchanges run all their operations in-house and are completely centralized. As blockchain technology evolves, gradually people try to take things in the centralized world and make them decentralized. Decentralized exchanges (DEXs) do not use central orderbooks, risk and matching engines and instead run all their operations on blockchains.
Centralized exchanges are typically faster and have lower fees, but they subject users to KYC requirements and in some cases, lose user funds to hacks or fraud. So the race to make the perfect DEX is ongoing.
OptiFi is a protocol that operates on the Solana blockchain as a cryptocurrency derivatives exchange. Last week, a simple coding error by a member of the Optifi team resulted in the project having to permanently close down and the loss of over $600K USD. The team is refunding all users of the platform. The future of finance is here guys.
2. Back from the Dead LUNA was up over 300%
As a quick recap, LUNA was one of the largest and most catastrophic events to impact crypto…ever. It was a top 10 ranked coin that essentially went to zero in a matter of weeks. The mechanism that helped its counterpart stablecoin (UST) maintain its $1 peg led to trillions of LUNA being printed, essentially printing the value of the coin away.
In the last few weeks, LUNA has seen a huge surge, having climbed over 500% and getting re-listed on exchanges like FTX, even crossing a $1 Billion market cap mark.
The reason for this price rise was a recent proposal that places a 1.2% tax on every LUNA transaction, this tax is then used to buy back LUNA tokens. This is a form of supply burning and takes coins off the market, making the asset more scarce. The goal of this proposal is not to increase the price of LUNA but instead to bring the supply down below 20 billion tokens, currently, the supply is over 6 trillion.
3. Starbucks Partnered up with Polygon
Polygon is a major layer1 blockchain, just like Solana, Binance Chain or Ethereum. This week Starbucks announced they would finally be launching their NFT-based loyalty programme, all of which would be run on the Polygon blockchain. Some of the biggest complaints with Ethereum are low speed and high fees, often users switch to alternative layer one blockchains like Polygon to take advantage of their different approach toward blockchain scaling.
Customers at SBUX will be able to earn digital stamps with purchases, these stamps are going to be NFTs that will allow the user to redeem “unique experiences”.
4. Arrest Warrant Issued for Do Kwan
We just spoke about LUNA, but what happened to the guy who made it? You can imagine a few people would be mad at the guy who made a project that evaporated $30 Billion worth of people’s tokens.
This week a South Korean court issued an arrest warrant for Do Kwan and a few others from Terraform Labs (the company behind LUNA) on allegations that include violations of Korea’s capital markets laws.
The fall of Terra/Luna and UST has led to additional regulatory scrutiny of crypto and stablecoins, Do Kwan says he’s willing to work with authorities as allegations of illegal activity behind the crash have come to light.
5. The Ethereum Merge is Complete!
This week the long-awaited Ethereum merge was finally completed. As a quick reminder, the merge was finally part of Ethereum’s journey to becoming a Proof of Stake blockchain. Essentially, there was a blockchain running in parallel to Ethereum which the main chain “Merged” with on September 15th. Transactions are now being processed on Proof of Stake Ethereum.
Being the second largest cryptocurrency, this change is incredibly significant for crypto and an impressive technological feat. The merge will reduce Ethereums energy footprint by nearly 99% and eventually reduce the number of Ethereum tokens issued by approximately 90%.
Who doesn’t love scarce green programmable money?