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Did Delphi Digital predict UST collapse?

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Delphi Digital, crypto-focused research and investment firm has published a post-mortem on the losses incurred by the collapse of TerraUSD (UST) algorithmic stablecoin last week, concluding that “something like this was always probable.” Delphi wrote late Wednesday on its blog,

“We understood the risks of the algorithmic model upfront and sought to be transparent about them throughout; however, it’s clear we miscalculated the risks. To the vocal critics of Terra’s algorithmic design — you were right and we were wrong.”

Last week, UST de-pegged from the dollar in a disastrous manner, wiping out more than $40 billion in value for investors. Delphi, which competes with The Block for crypto research, was a supporter of the Luna Foundation Guard (LFG), a Singapore-based non-profit with an aim to improve the Terra ecosystem.

LFG’s bitcoin purchases, Delphi digital wrote in an April research bulletin, “gives higher security to protect UST’s peg to the dollar” and “likely reduces the likelihood of it going into a death spiral.” In March, the company announced that customers may pay for their subscriptions with their UST balance and income received from Terra’s Anchor Protocol.

Delphi Digital, one of Terra’s significant operator

Delphi Digital was one of many cryptocurrency exchanges with major exposure to the Terra ecosystem at the time of its demise. For the first time, the group openly assessed the damage in its post.

Delphi Ventures Master Fund purchased an amount of Terra’s native token Luna equal to 0.5 percent of its net asset value in early 2021, according to the company (NAV). Over time, the exposure grew, resulting in “a significant unrealized loss.” Luna and other Terra-native coins accounted for about 13% of Delphi Ventures’ NAV at its peak.

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LFG

Luna received a $10 million investment from LFG in February as part of a $1 billion token sale. Based on the current price of Luna, Delphi said the investment is “completely wasted,” but added that it sold no Luna during the token’s decline. LFG’s governing council includes Delphi Digital partner José Maria Macedo.

Since February 2021, Delphi’s research arm has produced six Terra-focused publications, none of which were paid for, according to the group’s blog post. According to the report, Terra’s demise had little financial impact on Delphi Research.

Blockchain ain’t no gold chain

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Nobel Prize-winning economist Paul Krugman criticized organizations for leaping onto the blockchain hype, in a recent tweet.

People want to cash in on the new catchphrase by flacking “blockchain something.” “Blockchain vitamin supplements next?” a  Netizen joked. Other users mentioned “AI” and “cloud,” among other prominent buzzwords.

In 2017, during the height of the cryptocurrency mania, blockchain was the hottest new thing. Long Island Iced Tea Corp, a tea firm, famously changed its name to Long Blockchain, causing its stock to jump by more than 200 percent. Three people were convicted of insider trading in 2021 after buying the company’s stock before the branding.

Krugman has long been a sceptic of Bitcoin, writing an op-ed in the New York Times in 2011 titled “Golden Cyberfetters” in which he ridiculed the world’s first cryptocurrency.

The eminent American economist did not go ignoring the latest cryptocurrency market correction, which was precipitated by the demise of Terra.

Krugman claimed in a New York Times op-ed published earlier this week that the most recent bitcoin crisis is different, stating that cryptocurrency is essentially a gigantic bubble fueled by fear of missing out.

Blockchain critic takes a swipe at Bitcoin

Krugman cited “uncomfortable comparisons” between bitcoin and the subprime mortgage crisis in January.

Krugman argues that fiat currencies going “to hell” will result in a slew of additional political and societal issues that cryptocurrencies will not be able to solve.

However, proponents of cryptocurrency believe that Krugman’s views are overly narrow since he ignores recent technological advancements in the Bitcoin ecosystem.

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In a Bloomberg Wealth story, he mentions Hungarian-born billionaire Thomas Peterffy’s advice to save up to 3% of personal wealth in cryptocurrencies in case fiat money fails.

Peterffy believes that cryptocurrency prices could skyrocket to millions or plummet to zero, which is why his wager is modest. He said,

“

I think it can go to zero, and I think it can go to a million dollars.

Krugman stated in May that he had given up attempting to foresee Bitcoin’s rapid death, saying that its cult can “indefinitely” persist.

Crypto supporters, on the other hand, believe that, like in the past, the cryptocurrency business will be able to recover after a significant downturn.

Terra’s outage hinders LUNA-based ETN from trading

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After Terra lost nearly all of its value in a week, three distinct exchange-traded product (ETP) issuers stated they would stop trading and issuing shares in LUNA-related investment vehicles.

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In Europe, VanEck, Valour, and 21Shares, which all offer luna ETPs, have ceased issuing shares, citing the network’s recent difficulties, which include two complete shutdowns of the apparently decentralised network. This week, all three items lost nearly all of their value.

Given the halts in the LUNA Network, issuer VanEck said today that it will cease creations and redemptions for its VanEck Terra ETN. LUNA’s blockchain was shut down twice in 24 hours due to concerns that it had been vulnerable to an assault. Do Kwon, the co-founder and CEO of Terraform Labs, has since proposed a $1 billion token creation proposal. VanEck’s statement said,

“VanEck is unable to conduct transactions in Luna through the Terra network. Therefore, it is technically not possible to accept creations and redemption for VanEck Terra ETN.”

21Shares released resources on the LUNA collapse, stating that the indexed products will reflect the LUNA volatility.

21Shares, like VanEck, is unable to perform the creation and redemption methods in its product due to the network outage. Hany Rashwan, the firm’s CEO and co-founder, told ETF Stream that the issue would be continuously monitored.

Valour, on the other hand, has decided to suspend its Valour LUNA SEK, citing “extreme volatility and persistent uncertainty” in the LUNA environment. The Nordic Growth Market exchange is where the product is traded.

Terra’s LUNA makes a small comeback

According to Coingecko data, LUNA has had a mini-comeback in the last 24 hours, with its value rising by nearly 3000 percent to trade as high as $0.00058798. The crypto sector has seen one of its worst sell-offs in recent days, with Terra blockchain suffering the most.

The value of Layer 1’s native token, LUNA, which was among the top 10 most valuable digital assets by market cap, plummeted by 100 percent. To put things in perspective, just a week ago, the crypto currency was trading for over $70.

Apart from LUNA, the network’s stablecoin, UST, has also lost its peg and has become the latest algorithmic stablecoin to fail.

Google Aims To Become The Numero Uno Choice For Blockchain Developers

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Aiming to lead the Web3 space, Google’s cloud division has announced its new team that would be offering services for developers running blockchain applications. This was revealed by Amit Zavery, vice president at Google Cloud, on 6th May adding that “the 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 in an email.

“We’re not trying to be part of that cryptocurrency wave directly,” Zavery told CNBC in an interview. “We’re providing technologies for companies to use and take advantage of the distributed nature of Web3 in their current businesses and enterprises.

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Moving forward, the tech firm is planning to build a system for companies that are looking to incorporate blockchain data easy for people to explore while simplifying the process of building and running blockchain nodes for validating and recording transactions, Zavery said.

He also said that Google’s tools can work in other computing environments, such as Amazon Web Services.

While investors look for a lesser volatile option like cryptocurrencies, enthusiasm surrounding other blockchain-based projects is on the rise.

According to Zavery, these crypto applications have made their way into the mainstream and have increasing relevance in industries such as financial services and retail.

Google might have a competitive advantage?

As the global tech giant fight for market share against fierce rivals like Alibaba, Amazon, and Microsoft, Google intends to provide offer “back-end services to developers interested in composing their own Web3 software.”

In January this year, Google’s cloud unit unveiled a plan for a Digital Assets Team to tap into the NFT market. The firm said it was looking at how customers could make payments with cryptocurrencies.

The search engine giant along with Amazon and Microsoft forms the big 3 cloud providers. Amazon AWS might be leading the pack but the business is growing faster than its core advertising unit.

Google cloud platform Alphabet’s CFO Ruth Porat said last week that the fastest growth in headcount is inside the cloud division.

Blockchain Development and Its Future

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Blockchain first entered the world as the Distributed Ledger Technology (DLT) supporting the earliest Bitcoin transactions; done by Satoshi Nakamoto themselves. 

Almost sixteen years have passed since then and blockchain development has come leaps and bounds, becoming the cornerstones of multiple markets and its own industry in its own right. The rise of blockchain developer companies, seemingly popping up out of every corner, shows the potential of blockchain technology. 

The crypto-sphere is too often focused on hype coins like Shiba Inu or speculative price analysis. However, the real value is being driven into blockchain development by some of the smartest individuals on the planet with trustless, permissionless, and decentralized values at the cornerstone of their coding. 

In this article, we will discuss Layer 1 vs Layer 2 blockchains, the major blockchain development companies, and what we can expect from blockchain in the near future. 

Blockchain Development Leaders 

Although there are dedicated Blockchain development companies making waves in the industry, more traditional technology companies, such as Microsoft, are also active in the space. In September of 2021, it was declared that Microsoft is shutting its Azure blockchain down due to declining interest in the product and Blockchain-as-a-Service (BaaS).

Microsoft gave their existing clients a converting solution through ConSensys. 

One of the leading blockchain companies is Chainalysis, a company focused on building trust in blockchains through data. Their clients are not exclusive to Barclays, Commonwealth Bank, and Bitpay; their services monitor over $400bn worth of crypto assets every month. 

Other blockchain development leaders are quickly finding out the unique problems blockchain technology solves, the efficiencies they create, and the services they care for which we once thought were riddled where middlemen.

For example, short-term decentralized car rental systems have been created on the blockchain, which promotes peer-to-peer rental systems without a middleman. 

Lastly, one of if not the biggest companies embroidering blockchain technology is IBM, aiming to bring hyperledger to their client’s businesses. IBM has invested over $200m in blockchain development and is constantly hiring talented blockchain developers to join their company. 

Looking forward

As blockchain development continues to be the spearhead of the crypto community, many wonder what’s next? Many blockchain development companies will focus on two main aspects:● Blockchain as a service (BaaS)

BaaS is the bread and butter for blockchain developer companies, providing blockchain solutions for others wishing to build or use their own apps or smart contracts. BaaS often consists of basic services which the clients then build on top of; granting them a strong foundation on which they build their concept on. 

For example, companies will utilize BaaS companies to help keep their data safe, immutable, and private by using blockchain technology. It is a win-win solution, as customers are more willing to trust a service, knowing it is built on top of open-source smart contracts, instead of a centralized authority. ● Layer 1s Vs Layer 2 Blockchains (L1 VS L2)

With greater adoption already here and more projected in the future, Layer 1 blockchains, such as Ethereum, are all struggling with the biggest problem: Scalability.

Step in Layer 2 blockchains. Layer 2 protocols or frameworks are built on top of the existing chain to solve scalability and speed issues. A great example is Polygon, built on top of the Ethereum chain. 

Once Layer 2 is adopted, much of the grunt-work can be loaded off Layer 1 whilst keeping the security that comes from the chosen consensus mechanism. Adding a second layer is often called an off-chain solution to the problems faced by major L1s. 

These Layer 2 can now focus on speed and scalability whilst they benefit from the security of the L1. A great example is the Polygon Network aimed at helping the Ethereum blockchain scale. One of the greatest benefits of Polygon is the extremely cheap transaction fees compared to Ethereum, whilst utilizing the safety of Ethereum validations. Polygon transactions are often less than $0.01 compared to Ethereum’s $15 average.

On top of this, Ethereum can manage around 14 transactions per second, compared to Polygon’s ability to handle 65,000 transactions per second. 

Further, in the future, we are likely to see even greater development and adoption of L2 solutions to combat the life-long issues that L1 blockchains have suffered. 

Conclusion

Blockchain development is still in its infancy, with some of the biggest blockchains and blockchain development companies yet to even exist. It is an extremely exciting space; one that we hope continues to flourish. 

Only time will tell whether the promises made by large Blockchain developer companies will come true and mass adoption will occur. 

Here’s how Solana bit more than it could chew to cause an outage

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After an “insane quantity of data” invaded the proof-of-stake chain, pushing validators out of consensus and grinding still block production, Solana stakeholders hurried to put the network back together Saturday night.

Bots flooded Candy Machine, a popular NFT minting tool, earlier Saturday, causing an unusual flood of inbound traffic: four million transaction proposals and 100 gigabits of data per second — a network record, according to one source at the Solana Foundation.

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This swarm drove validators out of an agreement for unknown reasons. At 4:32 p.m. EST, block production became impossible, and the network fell black. Validators rebooted the cluster at slot 131973970 by 11:00 p.m. EST, coordinating using Solana’s Discord channels and a Google doc generated by one of the validators.

Anatoly Yakovenko, a co-founder who was away for much of the squabble, lauded the validator community for spearheading mainnet recovery. On Saturday, he was chastised on Twitter for reportedly going “MIA” amid a network outage.

Solana outage caused by a spike in transaction volume

Unlike the 17-hour downtime in September, the hard fork restart on Saturday did not result in new-and-improved code filling throughout the validators. They just resumed where the network had left off seven hours before.

Validators debated whether to write code that would temporarily halt Candy Machine transactions as they prepared for the restart. Some in the Discord questioned whether such a move amounted to censorship. Regardless, it would only work if two-thirds of validators agreed to participate. On Saturday night, it appeared that few did.

Solana, a proof-of-stake blockchain, claimed on Twitter that it successfully completed a cluster restart at around 11 p.m. ET on Saturday, following an approximately seven-hour downtime when the network failed to establish an agreement.

Phantom wallet and decentralized exchange are two services provided by the Solana ecosystem. As RPC node providers plodded back up, Mango Markets battled to get back on its feet.

The interruption caused a bloodbath in SOL markets, which lasted only a few minutes. According to CoinGecko, SOL token hit a 24-hour low of $83.13 roughly three hours into the outage before rebounding back above $89 again.

Engineers were still looking into why the network couldn’t recover from the transaction overload that triggered the outage, according to the Twitter message.

Hydra brings the fun back in app building

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Hydra is a set of technologies meant to help Cardano (ADA), the world’s biggest proof-of-stake (PoS) system and prominent smart contract platform, handle scalability and security challenges.

An unknown Crypto Twitter user asked IOG’s Matthias Benkort (@ KtorZ_) about the intricacies of Hydra’s architecture after the discussion about the newest enhancements to the Cardano (ADA) blockchain and its infrastructure.

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Mr. Benkort was asked about Cardano’s first-ever L2 solution’s modular design, which allows numerous decentralized applications (dApps) to be deployed to its infrastructure.  This L2 solution will be ready to onboard dApps with various architectures utilizing its different aspects (“Heads”) in a Lego-like way, according to the creator.

In addition, the actual design of Hydra and the timeline for its development will be determined by community demands; several parts of the fundamental “Head” are already entirely up to the community.

Recap on Hydra

Hydra is moving closer to testnet, according to Haskell Dev Matthias Benkort, who tweeted in December 2021. This is a Layer-2 blockchain solution that aims to scale the bigger Cardano blockchain by cutting latency and increasing transaction throughput (TPS).

Now, fast forward to the present, and it appears like a final version will be available soon. With the arrival of this L2 solution, users will have access to a scalable solution that will boost throughput, remove latency, incur low to no costs, and substantially reduce storage requirements.

This will be performed through an isomorphic scaling method, which functions by conducting transactions off the main chain while retaining the main chain as a secure settlement layer.

Isomorphic state channels, or heads, provide access to Cardano features such as native assets, non-fungible tokens (NFTs), and Plutus scripting. As a result, users benefit from the layer-1 blockchain’s benefits and security while functioning within a “sharded head,” of which there will be many. Benkort further stated,

“These are state channels that are capable of expediently reusing the exact state representation of the underlying ledger and, hence, inherit the ledger’s scripting system as is.”

In theory, when more heads are added to the network, it will become faster. At the time of writing, Cardano (ADA) was priced at $0.782133 and had plunged by 3.2% over the last 24 hours.

Optimism is optimistic about new governance structure

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The Ethereum scaling startup Optimism announced on Tuesday that it will transition to a new governance structure that will be fueled in part by a dedicated token.

The information was revealed in a Twitter announcement thread. The Optimism Collective, which is made up of two parts: a “Token House” and a “Citizens House,” is at the centre of the initiative.

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According to the team’s release, the Citizens’ House will oversee public goods funding, generating a flywheel of protocol development, while the Token House will focus on token development “Upgrades to protocol, project incentives, and more It promotes development.” The Token House’s core is the OP governance token.

Multiple airdrops by Optimism

The Ethereum scaling startup also claimed the following: “There isn’t just one airdrop here. There will be a large number of airdrops.” According to the thread, which includes a post outlining eligibility for the airdrop as well as a link to allocations, the airdrop is “coming in Q2.” The initial airdrop date will be announced soon.

The foundation stated that a portion of the OP allotment will be distributed in successive waves to members of the business and Ethereum communities.

Airdrop #1

The first user airdrop will release 5% of the total supply of OP tokens. This airdrop is intended for those who:

  • Behave in positive-sum ways.
  • Contribute actively to their communities.
  • Have been priced out of Ethereum.

However, it has been stated that the addresses and quantities were selected to both reward blockchain users and encourage core Ethereum users to the OP family.

Future airdrops (#2, 3, …)

Furthermore, a portion of the OP token supply will be retained in reserve for future user airdrops, amounting to 14% of the total supply. Because airdrops can be manipulated, the foundation will be in charge of determining airdrop metrics as fairly as feasible.

However, the airdrops are intended to be distributed to addresses that have a positive impact on the Optimism community.

The news comes only days after social media boffins discovered an Optimism-related price page on cryptocurrency exchange Coinbase, stoking rumors about a token. The Collective’s course will be guided by a freshly founded foundation at first. Two of the founders of Optimism are among the group’s leadership.

Welly’s to maximize efficacy for SHIB burn process

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Welly’s, the world’s first SHIB-themed restaurant, which is situated in Naples, Italy, announced its plans on Tuesday (April 5), including burning $SHIB every time someone purchases through the crypto payment process NOWPayments.

Due to expensive fees, the burger joint will use a gift card system, but the company claims that things will be much easier once Shibarium, a layer-2 solution, is implemented. However, Welly’s also accepts payments in the native SHIB token, and it aims to add functionality for rival meme coin Dogecoin (DOGE) in the future.

Mercury like franchise launch of Welly’s

The burger joint underwent a dramatic revamp in February, with Shiba Inu serving as the official mascot. The burger joint of Naples then stated that it was willing to grow internationally. The restaurant stated in a new blog post that the next premier outlet could open in early 2023.

The team is also putting in place “the most appropriate applications,” in anticipation of a “wildfire” of franchise openings in 2023. Welly claims to provide “healthy” fast food to its consumers, which is meant to set it apart from the likes of McDonald’s.

Furthermore, flagship store, ghost kitchen, and take-away are three separate business concepts in Welly’s vision, each of which is sustainable and adaptable to the franchiser’s needs and ideas. Each of the models will be fully supported and monitored by the main staff to ensure that the business runs smoothly. As a result, community members and prospective entrepreneurs will have three options to choose from.

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Welly’s 3D NFTs

Furthermore, Welly’s has dabbled in the non-fungible token arena as well. In late March, it introduced two new NFTs. The burger joint has claimed that there will be prizes and staking opportunities for holders of each NFT and that different NFTs picked by the community will be utilized for our marketing campaigns, Welly Meals, and on the packaging through challenges involving the community. To combat bots and “paper hands,” Welly has introduced a whitelist for purchasing NFTs.

In addition, the Shiba Inu team recently collaborated with fashion company John Richmond to develop an NFT collection. With the help of NOWPayments, John Richmond has also vowed to burn SHIB tokens. At the time of press, Shiba Inu (SHIB) was priced at 0.0000268 with a daily rise of 0.10%.

LUNA the next layer-2 for Bitcoin? Terra’s founder thinks so

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Do Kwon, the founder of Terra (LUNA), claimed in a recent edition of the Unchained podcast with Laura Shin that Terra (LUNA) is a layer-2 solution for Bitcoin (BTC), and that Bitcoin just needs to be good at one thing: being a valued asset.

Kwon feels that Terra (LUNA) can help Bitcoin bridge the gap to various use cases across a myriad of apps from DAOs to NFTs to DeFi.

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Kwon has stated that a dip in Bitcoin’s price would be “bad” for the stability of the UST stablecoin, but he believes Bitcoin (BTC) would rise. Kwon informed Shin that he is unconcerned by short-term volatility because he believes in BTC’s long-term growth. He further added,

“I’m sort of betting that the long term scenario of Bitcoin going up and the reserves being strong enough to withstand UST demand drops is the more likely scenario.”

Many individuals believe Ethereum (ETH) will eventually outperform Bitcoin (BTC) in terms of value, according to Kwon in the podcast. Kwon, on the other hand, disagrees. He believes Bitcoin will remain at the top because it is calcified and reluctant to adapt to new technology. While Ethereum is slower to adapt than some of the other smart contract networks, it is still much faster than Bitcoin.

Ethereum, according to Kwon, does not have the same foundation narrative or Lindy effect as Bitcoin. The Lindy effect is a theoretical phenomenon in which the future life span of non-perishable objects, such as technology or ideas, is proportionate to their current age, for people who are unfamiliar.

LUNA the most valued prospective Bitcoin holder

Terraform Labs, which created the Terra (LUNA) blockchain platform, plans to purchase $3 billion in Bitcoin as a backup for the UST stable coin.

Kwon has been buying Bitcoin (BTC) to hold as 40 percent of the UST stablecoin’s collateral in Terra’s treasury. Terra has so far purchased 30727.9 BTC, with the most recent buy on March 29 being 2,943 BTC. Terra is currently the third-largest holder of Bitcoin Cash in a single wallet.

One of the key goals of the Luna Foundation Guard (LFG), Terra’s treasury, according to Kwon, is to make Terra “the largest single-wallet holder of BTC.” Kwon will need to collect more than 125,051 BTC to dethrone Michael Saylor’s MicroStrategy, according to Bitcoin wallet tracker Bitcoin Treasuries.

Kwon’s remark stunned the cryptocurrency community. Antiprosynthesis, an Ethereum (ETH) developer, retweeted, asking if all entities using BTC to support a stablecoin are Layer-2 solutions. At the time of press, Terra (LUNA) was priced at $102.74 with a drop of 4.4%.