Why do we fall, Bruce?
Well, that was the most craziest week of the crypto world. Over $40B worth of crypto wealth was wiped away along with the collapse of Terra Luna and UST. As many feared, Terra Luna fell into a death spiral with its stablecoin UST losing its peg and Luna falling 100% from its ATH.
What exactly happened? Bankless has covered a complete postmortem on crypto’s biggest collapse and Luna meltdown. Check out the full story here - UST Luna Meltdown: What Happened?
With Terra’s collapse, it seems like algorithmic stablecoins are impossible to pull off. But in Nelson Mandela’s words, “It always seems impossible until it’s done.” Terra was technically very close, but it failed nonetheless. Someday, someone will make the algo stablecoins a reality. Just like airplanes were a bad idea once, so was landing on the moon.
If you’re among the victim of Terra’s collapse, you need to read the following sentence. This whole saga reminds me of the first part of the popular Batman trilogy, ‘The Batman begins’ when Thomas Wayne asks his son when his son falls into a dry well, “Why do we fall, Bruce? So that we can learn to pick ourselves up.” This is and will remain one of my favorite monologues from the popular trilogy out of the many.
Terra is dead; long live Terra!
TL;DR last week in Web3 Wednesdays:
- Ripple effects of Terra’s collapse
- Resurrection #TerraIsMoreThanUST
- El Salvador’s President Nayib Bukele announces 44 countries to meet in El Salvador to discuss Bitcoin
- Some fun amidst hard times
- Getting a non-tech job in Web3
- Great Read: Understanding DAOs
- Web3 developer tools list
Ripple effects of Terra’ collapse
With Terra’s massive collapse, we’re now seeing the ripple effects across the web3 ecosystem; here’s the list of ships that went down with Terra’s collapse.
First of all, the biggest scare was the brief de-pegging of USDT. With Terra’s fall and de-pegging of its stablecoin, people even started selling $USDT in panic, pushing the price of USDT all the way down to 0.95.
Venus Protocol suffered a $13.5m loss because Chainlink oracle stopped updating the price of Luna below $0.1 while the market price was $0.01. This allowed users to lend $Luna and borrow against it 10x more assets than possible under normal conditions.
The same issue happened to Blizz Finance on Avalanche, with the protocol losing its TVL from $10M to zero.
Gro Protocol was exposed to $UST in one of their farming strategies. The team continuously monitored the situation but failed to take necessary actions to prevent huge losses.
Mushroom FInance’s TVL went to zero as well, with its WETH & WBTC vaults on Ethereum getting liquidated due to a de-peg of $UST and imbalance curve pool
Kava Platform hardcoded $UST to $1. Users were able to mint $USDX (native stablecoin from the Kava chain) against UST at 99% LTV without risk of liquidation. Of course, $USDX lost the peg as it was minted against 0 value $UST and dumped on the market right away. Protocol has lost ~$300m in TVL or ~50% in a few days. In addition to the $USDX collapse and investors faith.
According to a tweet thread by Apoorva Mittal (reporter at Economic Times), Terra's collapse has also impacted Indian VCs invested in startups building for the ecosystem. Accel India was an investor in two such startups: Stader Labs and Leap Wallet.
VCs making investments in lieu of tokens have also taken a hit amid a broader decline in the crypto market. The top 10 tokens have lost ~25-40% market cap in the seven days. Sequoia Capital India has made 70% of its investments in tokens.
VCs are now hoping for a correction in valuation, renewed focus on fundamentals, and backing coins supported by real business and revenue. Slow down in funding is unlikely, per sources.
Ever since the fall of Terra, the LUNAtics community has been trying hard to save whatever is left. Numerous proposals have been put forth with different ideas, from forking the chain to burning the Luna supply or even going forward as a Layer-1 chain without a stablecoin.
With this collapse and the following drama, the LUNAtics community has surely lost faith in the teams behind Terra, including Do Kwon himself, along with communication failure from TFL (Terra Form Labs) & LFG (Luna Foundation Guard).
Finally, amidst all the drama with competing interests from varied stakeholders (e.g.,$LUNA holders, $UST holders, Terra builders, etc.) making it extremely difficult and unlikely to achieve consensus on a cohesive, congruent plan. Do Kown has put forth a new proposal titled - Terra Ecosystem Revival Plan 2
The revival plan suggests forking the Terra chain and a new token distribution with a total supply of 1,000,000,000 Luna tokens. These tokens will be distributed as
- 25% - Community pool, controlled by staked governance
- 1% - Essential Developers emergency allocation. No lockup
- 4% - Essential developers (1-year cliff, four years vesting thereafter, granted after launch traction)
- 35% - All bonded / unbonded Luna, minus TFL at “Pre-attack” snapshot
- For wallets with < 1M Luna: 1-year cliff, two years vesting thereafter
- For wallets with > 1M Luna: 1-year cliff, four years vesting thereafter
- 10% - Luna holders (staking derivatives included) at the “Launch” snapshot - 10% unlocked at genesis, 90% vested over two years thereafter
- 25% - UST holders at the “Launch” snapshot - 10% unlocked at genesis, rest vested over two years thereafter
Read the full proposals here: Terra Ecosystem Revival Plan 2
44 countries to meet in El Salvador to discuss Bitcoin
El Salvador’s President Nayib Bukele announces that 44 countries to meet in El Salvador to discuss Bitcoin.
Something is cooking in El Salvador. According to a recent tweet by Bukele, 44 countries’ representatives met in the country on Monday to discuss “financial inclusion, digital economy, banking the unbanked, the Bitcoin rollout and its benefits.”
Are we going to see some of these countries taking the orange pill and making Bitcoin a legal tender?
Well, only the time will tell.
Some fun amidst hard times
Well, let’s just say crypto twitter got a new theme song. Since the market tanked, this TikTok collaborating song has been trending, and people just can’t seem to get it out of their heads.
🎵CEO of being unemployed 🎵
Check it out here!
Getting non-tech job in Web3
The biggest myth is that web3 companies only hire developers and only look for tech roles. Well, that couldn’t be more wrong.
This excellent thread by Ronak Kadhi breaks the myth and lists the types of roles that don't require in-depth tech knowledge.
P.S: I’m working as a non-tech person in Web3
Great Read: Understanding DAOs
First of all, let me remind you of this great quote from the movie Into the Wild, “Mr. Franz, I think careers are a 20th-century invention, and I don't want one.”
Have you ever thought, how did humankind survive and make a living before industrialization or before there was a concept of a job? Ponder upon it for a minute.
We farmed, fished, ran our businesses, or split out time between these activities. But why am I talking about the concept of job and industrialization with the title “Understanding DAOs”?
That’s because the definition and meaning of jobs are changing. Here comes the DAOs. DAOs are essentially a paradigm shift in how we organize and collaborate at scale to fix the toxic culture of how companies work.
Intrigued? Check out this great read about DAOs by The Generalist - DAOs: Absorbing the Internet
Web3 developer tools list
Looking for a complete tools list as a web3 developer, including frameworks, smart contract languages, IDEs, testnets, Ether faucets, Ethereum clients, JS APIs, smart contract libraries, and more?
Check out this thread by Param, a smart contract developer listing all the web3 tools - Web3 developer Tools List 🌱 A Thread 🧵