MARKET WRAP

1. Dogecoin Rallies as Elon Musk Joins Twitter

CoinDesk – Apr 5, 2022 at 11:09pm EST

On Tuesday, April 5th, Twitter announced the introduction of Elon Musk as its newest member of the board of directors. The onboarding of Musk represents the largest shift in stakeholder ownership, as Musk owns 9.2% of the company, more than any other individual. 

Twitter CEO Parag Agrawal and Musk exchanged a variety of tweets on Tuesday indicating their optimism regarding the prospect of collaborating to improve the Twitter platform. It is worth noting that Musk has agreed not to purchase any more than 14.9% of the total shares of the company. Also, according to a regulatory filing with the SEC, Musk had already acquired his stake in Twitter by March 14th. 

According to Messari, following the Twitter announcement, Dogecoin ($DOGE) has risen 11%, demonstrating one of the biggest rallies for the token up to $0.16 for the first time in two months. Musk has certainly been instrumental to the rise and fall of the price of DOGE since its rise in popularity, having allowed the cryptocurrency as payment at Tesla supercharging stations and online merchandise stores.

That being said, it is unlikely that DOGE will be introduced into Twitter’s ecosystem. According to Path Trading Partners Chief Strategist and Stock Think Tank co-portfolio manager, Bob Iaccino, “his position on Twitter’s board makes it harder or him to use Twitter (if we were to assume he was deliberately using Twitter or this purpose) to pump the price of anything at all,” as his new ownership requires his significantly stricter adherence to regulations.

2. Tom Brady’s NFT Company to Launch ESPN’s First NFT Collection

CoinDesk – April 7, 2022 at 7:31am EST

American sports-television network ESPN announced on Wednesday its multi-year deal with Autograph, an NFT company co-founded by NFL Quarterback Tom Brady. Autograph highlights and mints moments of athletic greatness in professional sports as NFTs on the blockchain. This partnership will elicit ESPN’s very first NFT collection.

The collection itself will release in tandem with the docuseries “Man in the Arena: Tom Brady”, published on ESPN+ and Disney+. The show, which documents Brady’s journey from an unsung draft selection to one of the all-time American football greats, is already available for viewing on Autograph.io.

Autograph CEO Dillon Rosenblatt indicated that the first NFT collection itself will feature “three zine covers” that highlight iconic moments from Tom Brady’s career. 50 tokens will be signed by Brady himself. With the release of the docuseries’ 10th episode, a second NFT collection will be released.

ESPN follows sports betting giant DraftKings and entertainment company Lionsgate in partnering with Autograph, whose deals began last July.

3. Frax Finance’s FXS Jumps as Terra Introduces Stablecoin Pool “4pool”

CoinDesk - April 4, 2022

Frax Finance’s FXS governance tokens have surged nearly 80% in the past week after Terra developers introduced its newest liquidity pool “4pool” on stablecoin swap service Curve Finance.

Sam Kazemian, the founder of Frax Finance, tweeted recently that his “own personal goal is to make sure any project that holds FRAX is getting more than $1 of value per FRAX.” In short, any stablecoin that uses 4pool for its base liquidity will appear to receive direct support from both Terra and Frax. 

Curve Finance has now become a battleground for DAI and UST,  in which the most efficient liquidity providers are rewarded with CRV and the capacity to vote, which would serve to provide further token reward distributions to their pools and subsequently more staking activity from users into their pools.

4pool itself is comprised of two algorithmic, decentralized stablecoins FRAX and UST, and two centralized stablecoins USDC and USDT. 

 

 

4. Terra Founder Do Kwon to Back Stablecoin with a “Basket” of Cryptocurrencies

TechCrunch - April 7, 2022 at 3:55 AM GMT+7

Terraform Labs founder, LUNA token, and TerraUSD (UST) stablecoin creator Do Kwon has previously announced his plans to make some staggering purchases of Bitcoin to fund reserves that will “open a new monetary era of the bitcoin standard.” These reserve funds, amassing up to $10B in bitcoin, are intended to back UST in a decentralized foreign exchange reserve to keep the stablecoin’s monetary value fixed.

Most recently, on Wednesday, April 6th, Kwon certainly followed up on his word, tweeting casually about his purchase of $230M in bitcoin. In an interview with TechCrunch, Kwon indicated that Terra itself has amassed $1.6B in bitcoin, thus far, and plans to purchase an additional $1.4B with capital from the Luna Foundation Guard. Thereafter, the Terra protocol will purchase the remaining $7B of bitcoin or its $10B reserve fund initiative through users who want to mint UST. 

As ambitious as these plans appear to be, they are only the start of a much larger road map designed by Kwon and Terra. Over time, Kwon intends to purchase other Layer 1 blockchains (or L1s) to back Terra with a “basket of the top Layer 1 assets” predominated by Bitcoin.

In fact, Terra has moved swiftly ahead on this promise, recently purchasing $100M of AVAX through the Luna Foundation Guard, further diversifying their reserve portfolio. The purchase is representative of Kwon’s approach to diversifying collateral for UST buyers, as it would greatly increase UST adoption across ecosystems.

Bankless – a well-respected editorial perspective in the crypto world – remarked on the purchase, comparing Terra Luna with a traditional central bank. The FED, for example, who issues fiat currency, holds a variety of other financial assets to support the distribution of dollars; Terra, quite similarly, purchases large amounts of other L1 cryptocurrencies to support the distribution of UST.

Currently, there is a circulating supply of 16.72B UST on the market, with a current trading volume of $672M, up 9.2% as of Wednesday.

5. Sky Mavis Raises $150M to Restore Lost Funds from Ronin Hack

Axie Infinity - April 6, 2022

Sky Mavis, the game studio behind its flagship title Axie Infinity, has announced a recent round of fundraising. $150M brought in from Binance, a16z, Animoca Brands, Dialectic, and Paradigm will be used toward reimbursing the affected users from the recent Ronin hack that resulted in a loss of $625M.

In its recent Substack blog post, Sky Mavis accepted full responsibility for the hack on its Ronin blockchain, admitting that the hacking scheme’s efficacy resulted from how few validators the Ronin blockchain had. As a response to this, Ronin will increase its total number of validators from a meager 9 individuals to 21 within the next three months.

Even though the Ronin Blockchain has not yet come back online, users can still move ETH in and out of the Ronin blockchain with the support of Binance.

6. Tesla Finances New Manufacturing Arm with DeFi Protocol MakerDAO

Yahoo Finance! - April 2, 2022

Elon Musk’s consumer-electric car brand Tesla just received funding for one of its projects by DeFi protocol MakerDAO.

On March 30, the deal worth $7.8M was closed between Tesla and 6s Capital – a commercial lender powered by MakerDAO. The sum will be used to finance the construction of a new repair and collision center for Tesla.

A MakerDAO representative publicly disclosed that this is only the first of many potential deals that the two parties hope to close and collaborate with one another in the future.