5/20 Weekly Digest
We’re bringing back the FAL Weekly Digest, a source for this week’s biggest cryptocurrency-related news and updates.
This week’s biggest topics include the fall of Terra Luna, Adoption, Ethereum’s upcoming Merge.
Here’s what you need to know:
Terra Luna
Algorithmic Stablecoins and the Future of the Terra Ecosystem
Since the crash of the stablecoin TerraUSD (UST) and its sister coin Luna, the market has been slowly regaining ground in an effort to recover from an estimated $326 billion loss to the overall market value.
This dent in the market was a direct result of the $60 billion in liquidations from Terra’s ecosystem following a massive run on Luna, which then caused the UST stablecoin to lose its peg to the dollar.
For many still wondering how and why this happened, it’s imperative to examine the events leading up to this catastrophic ripple covered in the WSJ article.
There are different types of stablecoins but their purpose remains the same and that is to maintain a 1-to-1 ratio with a chosen fiat currency.
For algorithmic stablecoins like UST, the ratio relies on an algorithmic equation within a smart contract to balance the amount of UST against its sister coin Luna, without the backing of fiat reserves.
Crypto Adoption
The amount of big tech companies adopting crypto in some way is increasing very quickly. Meta (formerly Facebook), Spotify, and Universal are among those that have announced upcoming crypto features on their platforms.
Meta and Meta Pay
Meta CEO Mark Zuckerberg confirmed last week that their social media platforms: Instagram and Facebook would soon support NFTs amongst other potential crypto features.
But this week, many are speculating about a possible crypto exchange.
Meta also confirmed that their upcoming project, Lightspark, would be using the Bitcoin Lightning network to process BTC payments.
Spotify
The music streaming giant was reportedly surveying current users about web3 and NFTs. They also seem to be trialing an NFT promotional feature for a few selected artists.
Spotify seems to currently only be testing a feature for promoting NFTs without plans for a marketplace.
Spotify entered the metaverse earlier this month by introducing Spotify Island on Roblox. Roblox is a popular online platform that allows users to play games created by other users for free (most games include in-game optional purchases, usually aesthetics).
Read more on Info Hub
Read more on Spotify Island on Spotify Newsroom
Limewire Partners With Universal Music Group to Release NFTs
LimeWire's return was announced back in March, completely different from its first pirate-friendly iteration. The company is now pivoting into NFTs and the platform will run on Algorand.
LimeWire is set to make its return in the form of an NFT marketplace, focused on music-related collectibles, artworks, or exclusive unreleased tracks. LimeWire is apparently ready to launch its “official launch campaign” later this month, with the marketplace opening sometime after.
With the NFT market as a whole wavering due to stark crypto declines in recent weeks, it's good to see established companies still having faith in the technology, and if we know anything from trends, it's that celebrities get the public to adopt at a rapid rate.
Read More on Daily Reads
Panama Slows Its Crypto Adoption Efforts
Last month, it looked as if Panama would be the following Latin American country to adopt Bitcoin, as the country announced the approval of a bill regulating crypto.
All the bill needed was to be signed by the country's president before it became official, crypto devotees were hopeful the bill would pass. But it seems now that the country may be looking to backpedal.
In an interview with Bloomberg, President Laurentino Cortizo said he might veto the bill because he wants to make sure it aligns with global anti-money laundering standards.
“I have to be very careful if the law has clauses related to money laundering activities,” he said in a live interview
Ethereum and The Merge
Ethereum’s Ropsten Testnet will undergo a test merge in the next phase of testing. Ethereum’s switch from proof-of-work to proof-of-stake has been dubbed “The Merge” and has been in the works for the past few years. In recent months, testing has been heavy in preparation for the drastic change to its blockchain. The latest update in this process was discovered through developer activity on Github.
Testnets allow developers to upload smart contracts to the test blockchain using test ETH, which holds no value and can only be used on the test networks.
Ethereum’s Ropsten network is one of the most popular and most used Ethereum test networks.
The Merge is now expected between August and October later this year
High-level ETH developers have given a soft confirmation on expecting The Merge in August 2022.
ETH co-founder Vitalik Buterin is estimating a September/October release.
Market Analysis
The overall cryptocurrency market cap is currently $1.2 trillion with a volume of $78 billion. BTC dominance is currently at 44.9% with ETH dominance at 19%.
Ethereum Continues to Struggle Below New Resistance
On the daily chart, the MFI has been bordering oversold territory in this range for about a month. Contrary to the MFI’s lax movement, the MACD has seen some substantial movement throughout the past month and a half. The momentum waves look to be swinging upwards as the EMA lines look to be continuing their downtrend.
Bitcoin In Descending Channel
The MFI is bordering oversold territory as it looks to be making an attempt at swinging upwards. The MACD is swinging downward and looks like it could continue downward. With this being said, it’s very possible that Bitcoin could continue to experience some volatility in the coming days depending on fundamental developments.
