Daily News - June 14, 2022
TLDR:
Celsius freezes withdrawals and redemptions. BAYC under $100,000. Crypto market cap below $1 Trillion.
OpenSea Trading Volume:
As fear and panic spread, Ethereum touches a daily low of $1,174.48 (-16.4% from yesterday's close). On the other hand, OpenSea trading volume experiences a surge closing the day with $27.75M in daily volume - up 41.15% from yesterday.
Celsius:
Who Are They:
Centralized platform offering yield-farming services to non-technical investors
They’ve come under scrutiny due to mismanagement of users' funds
Track Record:
Extensive history of mismanagement of funds / suffering from exploits
$50M loss via BadgeDAO exploit
$500M deposited within Anchor Protocol
The extent of losses incurred by this has not been publicly disclosed; most estimates range > 100M USD
What's Happening Right Now?
The platform has currently frozen all withdrawals, redemptions, and transfers due to being illiquid
Why Are They in this Position?
Primarily due to overextending themselves via stETH (staked Ethereum via Lido) to the tune of $1.5B
stETH should technically be 1:1 with ETH, however, sETH is trading under peg at a rate of 1 stETH : 0.95 ETH (5% loss)
The remainder of their ETH (~ 288k ETH) is staked for ETH 2.0 - this will be inaccessible until 1-year post-merge
More and more users are trying to withdraw or redeem while Celsius is locked in illiquid positions (stETH and ETH 2.0 staking)
Solutions:
Use stETH as collateral and take out loans via AAVE
Risk of liquidation, especially with Alameda dumping stETH causing it to further decrease
Sell stETH
Due to low liquidity in stETH/ETH pools, if they sold their stETH it would cause stETH to further break the peg and drop more (some predict a ratio of 0.85:1)
Other platforms (e.g. Nexo) take over Celsius
News:
Punk6529 returns with a thread explaining the importance of cryptocurrencies for the metaverse. The primary reason boils down to ensuring that the metaverse isn’t privately owned by a singular entity. (Source)
Jarritos, a Mexican soft drink company, joins the Yuga Labs family with the purchase of MAYC NFT. (Source)
Due to the recent economic downturn, Microstrategy has paper losses of $1B from their BTC purchases. The stock is down 72.75% on the year. (Source)
Celsius, a centralized yield-farming protocol, temporarily suspends all withdrawals and transfers. Many are concerned about Celsius’s liquidity due to their exposure to the UST and stETH. (Source)
The global cryptocurrency market capitalization dips below 1 Trillion - currently standing at $981 Billion USD. (Source)
For those questioning their belief in this space, here are some excellent reads curated by Jason Yanowitz. (Source)
If you’re interested in learning more or joining a community of NFT traders, head on over to OriginsNFT