46th Edition

This week in The Flippening, TL;DR

• Bank Of America Survey Reveals 90% of Respondents Plan to Buy Crypto in 2022 crypto winters.
• Can this new messaging platform for Web3 communities replace Discord?
• Metaverse could be worth $5 trillion by 2030, according to the latest report from consulting firm, McKinsey & Company.

Top Highlights of the Week

Crypto winters as an investment opportunity: A study by BoA

According to a study by Bank of America, found that 90% of respondents were preparing to buy cryptocurrencies within the next six months. 30% of respondents said they had no intentions of selling their cryptocurrencies during the next six months

Nansen Connect: Can it replace Discord as the go-to Web3 community platform?

Crypto analytics firm Nansen has launched a messaging app called Nansen Connect. The app is touted as an alternative to Discord. Owing to the different hiccups faced by Discord, the firm announced that Nansen Connect will act as a safety net for Web3 communities. You require a crypto wallet to use it and is targeted at NFT and crypto communities.

Metaverse could be worth $5 trillion by 2030

Global spending in the metaverse could reach $5 trillion by 2030, according to a new report from international consulting firm McKinsey & Company. The report titled “Value Creation in the Metaverse” analyzed trends across 11 countries,  448 companies across 15 industries.

Other Highlights:

• Blockchain can prevent miscommunication between medical professionals that could prevent $11B losses every year!: Read it here
• Goldman Sachs launches first Ethereum-linked derivatives product: Read it here
• Tron DAO deploys $2B from reserves to guard against shorts: Read it here
• South Korea prepares new crypto laws after the Terra fiasco to protect investors: Read it here 
  

Disclaimer: All price movements are recorded up to 10:00 AM UTC

Yes, it is officially a bear market now! It means that there couldn't have been a better time to get hold of assets that you always planned to have in your portfolio. If any of your friends felt smart during the bull market, it is time to tell them to actually act smart!

Disclaimer: All price movements are recorded up to 10:00 AM UTC

Markets work in cycles. This bear cycle is allowing sectors to become fairly priced. However, just like other cycles, this cycle is bound to pass through!

Coin of the week

Polygon: $MATIC

This week our coin of the week is one of the most popular L2 or Layer 2 platform. The MATIC team has been hard at work on several network improvements. It has transpired into many different projects being implemented on Polygon.
Moreover, with the MATIC token trading at 1-year lows and a current market capitalization of $3.2 billion, it is bound to be a valuable addition to your crypto portfolio.

Crypto simplified

2018 was the year when the DeFi summer began. Since then, the space has leapt miles forward in innovation and adoption. However, this year DeFi has faced some of its biggest hurdles!

Before diving into the details, let us take a quick look at how DeFi platforms work! DeFi lending platforms essentially take money from lenders by promising a fixed interest rate and loan it to borrowers. On the face of it, they work just like a traditional bank; however, they pay far better yields - anywhere between 7-20%.

To give such interest rates to their users, they need to generate far more returns. For instance, if they have promised a 10% interest on your lending, they would strive to achieve higher to make some profits. Creating such high yields makes them susceptible to making riskier bets with your money. That is what happened with Anchor and what's happening with Celsius.

The Luna Fiasco

Luna promised 20% interest on USD-pegged stablecoins, but when markets began to tumble, the mechanism to hold the token at $1 failed :(, leading to the collapse of Luna, a $40 billion protocol. Celsius was one of the seven whale wallets contributing to the $UST depeg.

Staked $ETH de-pegging on LIDO

Then came the threat of another de-pegging. Celsius also promised 6-8% in interest on ETH deposits. They are likely staking ETH on the Beacon chain to meet these returns. Things seemed fine till this point!

However, the problem is that the Ethereum Beacon chain's assets are inaccessible or locked until the merge. That essentially means that if the platform faces an urgent requirement of liquidity in ETH, they wouldn't be able to come up with it, thereby creating a massive liquidity crisis. To solve this, Lido came up with Staked ETH ($stETH). They give you staked ETH in exchange for staking your ETH on the Beacon chain. Staked ETH can be used as collateral to borrow or provide liquidity to various DeFi platforms. It is a liquid 'derivative' asset that usually trades at a 1-to-1 ratio with ETH. There is a difference, it trades at 1-to-1, but it doesn't have to because it's not pegged.

In a rising market, this worked fine as everything else does. But with a liquidity crisis that started with Anchor and a bear market, the stETH/ETH ratio began to tumble.

The Celsius Meltdown

Celsius made many risky decisions with users' money by first holding UST by taking USDC and now by taking ETH and holding it in stETH. It worked so far because the markets were at their peak, but people want their money back when the crypto markets go down.

There are about $10b in customer assets in Celsius and about $1.5billion in Celsius' various wallets. Celsius also has illiquid positions of about $400m staked on the Ethereum Beacon chain and a leveraged position of $400m on the Maker Protocol. It is a clear mismatch of assets to liabilities.

 Featured - Mudrex Coin Sets

Smart Contract Platforms:- This Coin Set invests in tokens of platforms to build the smart contract infrastructure. Adding such potential tokens to your portfolio can offer stable investment opportunities for long term investors.

Metaverse:- With massive corporations entering into the metaverse space, this Coin Set invests in platforms building the infra which can potentially impact the metaverse space.‍

DeFi 10:- This Coin Set is created with the belief that DeFi will make finance more efficient and more accessible to everyone. DeFi revolves around decentralized applications (DApps) built on blockchains.

Here we are, at the end of our 46th edition. We hope you liked reading it. The team would love to hear back from you.