Results of the week of the blockchain industry
The results of the week of the blockchain industry and the cryptocurrency market, from Uncle Fibonacci — let’s go
1. Changpeng Zhao questioned the feasibility of Terra hard fork
A hard fork of the Terra blockchain with a rollback of the network to the time before the collapse of LUNA and UST will not work, because the new chain will not have any value. This was stated by the head of the Binance cryptocurrency exchange, Changpeng Zhao.
After the collapse of the Terra ecosystem, the project community proposed a hard fork and issue a new token. The distribution of the latter can be carried out according to the network snapshot made before the market crash.
The initiative also provides for a new mechanism for organizing the blockchain and the creation of a pool for the redemption of the UST algorithmic stablecoin.
“The fork will not give the new chain any value. This is wishful thinking. It is impossible to cancel all transactions after the old snapshot both in the blockchain and outside it (exchange),” Zhao wrote.
The head of Binance wondered about the use of the Luna Foundation Guard (LFG) bitcoin reserve. According to him, the assets should have been used to redeem UST, but they did not.
According to analytics firm Elliptic, LFG had about $3.5 billion in BTC. When the algorithmic stablecoin lost its peg to the US dollar, these funds were transferred to the Binance and Gemini platforms, which made it difficult to further trace transactions.
“Bitcoin reserves were quickly moved to two cryptocurrency exchanges, but it is not clear whether they were sold, moved to other wallets, or remained on the platforms,” the specialists wrote.
The Block analyst Larry Cermak tweeted that Zhao is paying a lot of attention to LUNA as Binance led the Terraform Labs seed round in 2019 and also invested $300 million in the company in 2021.
The head of Binance denied this information, after which Cermak deleted the tweet.
According to Zhao, Binance did not participate in Terraform Labs’ second round of funding. The head of the company explained that he was simply “pointing out potential problems” for the ecosystem.
“Coin issuance and forks do not create value. Buyback and incineration do this, but require funding. Funding that the project team may not have. […] I am not always right, but my position is this: failures happen. But when this happens, transparency, quick communication with the community and accountability to it is extremely important, ”he wrote.
2. Bitcoin mining difficulty hits new high
On May 11, as a result of another recalculation, the difficulty of mining the first cryptocurrency increased by 4.89% and reached a record high of 31.25 T.
Since the beginning of 2022, the indicator has been corrected negatively only three times. The maximum decrease was 1.49%.
Since the previous recalculation, the average hashrate has reached 223.7 EH/s.
According to Glassnode, the smoothed 7-day moving average of Bitcoin network computing power is 222.2 EH/s. A maximum of 227.2 EH/s was recorded on May 5th.
In 2022, the hashrate increased by approximately 32%.
3. Instagram reveals NFT support testing details
Starting this week, select Instagram users will be able to use NFT as their profile photo. 🐵
Test participants will need to connect a digital wallet and select the one intended for display on the NFT social platform. Commissions are not provided. Instagram announced a security policy update to strengthen account and wallet protection when connected.
Once the token is published, it will have a blinking effect and be able to display the public information associated with it from the blockchain. It is possible to automatically set tags on the collection and the owner of the token in the presence of appropriate privacy settings.
Instagram confirmed support for Ethereum and Polygon. Flow and Solana will be added later.
From the wallets for connection, Rainbow, MetaMask, Trust Wallet, Coinbase Wallet, Dapper and Phantom will be available.
Meta said that the functionality related to non-fungible tokens will also appear in Facebook. On Instagram, users will be able to use augmented reality NFTs in Stories via SparkAR.
The development team will continue to work on adding new features.
4.David Markus Launches Lightning Network Growth Startup
Former head of the Meta payments division, David Markus, announced the launch of a new company, Lightspark, focused on expanding the use of bitcoin.
Lightspark has been backed by many major investors including Andreessen Horowitz, Paradigm, Coatue and Matrix Partners.
According to Marcus, in the first stage, the company is gathering a team to study and develop the Lightning Network protocol.
Lightspark plans to create an infrastructure for companies, developers and merchants to conduct transactions through the Lightning Network.
Let me remind you that Marcus was the head of the blockchain division of Facebook (now Meta) and participated in the development of the Libra digital currency project. Due to the pressure of the regulators, it was never launched.
5. Elon Musk suspends deal to buy Twitter
Elon Musk has suspended the process of buying Twitter after the media reported on the overestimation of the audience of the social network. Fake or spam accounts “made up at least 5% of its monetized daily active users,” Reuters writes, citing a company report. According to the billionaire, he is still set on acquiring Twitter.
6. PancakeSwap will limit the supply of CAKE to 750 million tokens
The PancakeSwap DeFi community powered by BNB Chain has supported changes to tokenomics, the key of which will be to limit the supply of the CAKE governance token to 750 million coins.
98.8% of votes were cast in favor of the proposal.
The PancakeSwap team said the proposed upgrade would “increase the profitability of IFOs and the profit farming of blocked CAKEs.” The developers plan to implement the changes “in the near future”.
At the time of writing, there are over 296 million CAKEs in circulation (CoinGecko). It is planned that the issue of the entire volume will end within three years.
The business developer of the project, under the nickname Chef Icy, in a comment to Cointelegraph noted that this period is a conservative estimate based on the issuance of 14.25 tokens per block. In reality, due to regular burning, the effective emission per block is about 10.5 CAKE. Based on this, a full release would take about 4.5 years, Chef Icy estimated.
7. Kraken will explore the possibility of trading traditional securities
Kraken is considering offering shares to customers alongside digital assets and NFTs. This was revealed by CEO Jess Powell in a conversation with Decrypt.
According to Powell, cryptocurrency brokers are evolving towards creating “super wallets” that will allow consumers to transact with all assets, including traditional ones.
“I think you will see all of these exchanges converge on a similar feature set, sort of a super wallet, an omni-product app with NFTs, spot and FX markets, maybe stock trading, and even more extreme variations of cryptocurrencies. We have already said that we are studying stocks, and I think it makes sense to do this, ”he said.
Powell noted that competition in the crypto industry has intensified as many new players have entered the market. However, he does not believe that this will affect Kraken’s trading fees, which are the largest source of income for the company.
The head of the exchange emphasized that many clients are “relatively insensitive” to fees, and therefore “in the end, it all comes down to UX and the ability to do what you want in one application.”
8. VeChain Foundation keeps $1.2 billion of cryptocurrencies in reserve
The VeChain Foundation, which developed the VeChain (VET) cryptocurrency blockchain, has published its financial report for the first quarter of 2022.
According to the document, as of the end of March, the firm had $1.2 billion worth of digital assets in reserve. Of these, $1.13 billion came from bitcoins, Ethereum (ETH) and VET and almost $87 million in stablecoins.
Compared to the fourth trimester of 2021, the cost of cryptocurrency in the VeChain Foundation storage has decreased by 12%. The organization explained the negative dynamics by the fall in the exchange rate of virtual currencies and the growth of expenses.
In addition, in the first three months of 2022, the company spent $4.1 million to develop the blockchain ecosystem and maintain the services. VeChain Foundation did not report income, so it remains a mystery how much she managed to earn on her products.
On March 14, 2022, the first stablecoin VeUSD (VEUSD) appeared on the VeChainThor blockchain, which was developed by the tech company Stablú and issued by the financial firm Prime Trust. The cost of coins is pegged to the dollar exchange rate, and they can be exchanged for fiat currency at any time. By the end of the first quarter, the number of VeUSD in circulation reached 5.2 million.
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