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, a survey of 1,000 people conducted in early June found that 90% of respondents were preparing to buy cryptocurrencies within the next six months.
Many investors are already talking about how long this crypto winter could last. Still, according to Bank of America, most retailers are waiting for the ideal time to buy cryptocurrencies as soon as this year.
According to Bank of America, 30% of respondents said they had no intentions of selling their cryptocurrencies during the next six months despite the massive decline that the crypto market has suffered.
Nansen Connect: Can it replace Discord as the go-to Web3 community platform?
Discord is currently the reigning messaging app of choice for the Web3 community, ranging from NFT projects to DAO communities. However, it has frequently witnessed a fair share of scams. These events are taking the shine off of the long-standing winner in this category. Now, crypto analytics platform Nansen has a new solution to connect communities in the space.
The crypto analytics firm, Nansen, assures that Nansen Connect will have added layers of security and scam prevention measures. You would need to have a crypto wallet to get started.
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.
Published yesterday, the 77-page report titled “Value Creation in the Metaverse” analyzed current adoption trends and drew additional insight from two global surveys; one gathered data from 3,104 consumers across 11 countries, while the other polled a range of executives from 448 companies across 15 industries in 10 different countries.
E-commerce will be the primary cash cow in the metaverse, with McKinsey predicting it to make up anywhere from $2 trillion to $2.6 trillion of all spending by 2030. Virtual advertising will be another major sector, with associated revenue expected to make up another $144 billion to $206 billion.
📰 Other news and top reads:
- Blockchain can prevent miscommunication between medical professionals that could prevent $11B losses every year!
- Goldman Sachs launches first Ethereum-linked derivatives product
- Tron DAO deploys $2B from reserves to guard against shorts
- South Korea prepares new crypto laws after the Terra fiasco to protect investors
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🤑💸
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.
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. Please write back with your feedback, comments, and stuff that you’d like us to include in the newsletter.