Emergency powers
Good morning. Emergency powers were activated then deactivated on a Solana-based lending protocol, Alameda provided a $500 million loan to prevent contagion, and Bancor limits impermanent loss features. All that and more today!
Market Update (as of 9:14am ET):
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Top 5:
1. DeFi protocol Solend passes governance vote to reverse ‘emergency powers’. On Sunday, Solana-based lending protocol, Solend voted on an "emergency powers" governance proposal that allowed the protocol to take over a whale's account that was on the verge of a potentially dramatic on-chain liquidation. The anonymous whale had deposited 95% of Solend's SOL pool and made up 88% of USDC borrows. The original vote, which passed, was heavily criticized on Twitter, and forced the team to backtrack with a new vote that invalidates the "emergency powers" and allows for less drastic measures to avoid the massive liquidation. One of Solend's founders said, "we need to act swiftly to address the systemic risk and fact that normal users can’t withdraw USDC."
Absolute comedy. @solendprotocol, a supposed “decentralized” lending protocol built on Solana has “voted” to take over a whales account with emergency powers to eliminate the chance of forced liquidation.
— Dylan LeClair 🟠 (@DylanLeClair_) June 19, 2022
“Decentralized” in name only. pic.twitter.com/Vrua3dFoES
2. Voyager to borrow $500M from Alameda amid insolvency rumors. The cryptocurrency broker has received a $500 million dollar loan from Alameda Research in order to weather volatile market conditions. The loan is broken into two parts. The first is a $200 million credit facility made up of cash and USDC. The second piece is a credit facility made up of 15,000 BTC (~$309 million). The announcement of the loan came amid speculation that the firm was insolvent or close to being insolvent. In an interview with National Public Radio, Alameda founder Sam Bankman-Fried indicated that he felt responsibility to help stem contagion.
2) also:
— SBF (@SBF_FTX) June 19, 2022
"I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion," he said. "Even if we weren't the ones who caused it, or weren't involved in it. I think that's what's healthy for the ecosystem..."
3. Gaming firm Admix reaches $300M valuation following merger, rebrand. Admix, known for non-intrusive, in-game product placements has merged with LandVault, the largest metaverse "construction company". The deal, which valued Admix at $300 million, will see the two companies operate under the LandVault name. Admix launched their first metaverse project in February and quickly saw revenue from their metaverse offering outstrip their traditional media revenue. This growth prompted the Admix team to look for a metaverse construction company partner to grow their business of helping big brands enter the metaverse. LandVault is platform-agnostic and operates in the Sandbox, Decentraland, and other metaverses.
4. Bancor halts impermanent loss safeguard to fight off ‘hostile antagonist’. Bancor, a decentralized automated market maker and exchange protocol, has paused their impermanent loss feature in response to “hostile market conditions” and “manipulative behavior.” The team at Bancor indicated in a Twitter Spaces discussion that they had discovered "another Celsius wallet" intending to withdraw $10 million from the protocol. The tweets below lay out the Celsius strategy to sell a large quantity of the Bancor native token ($BNT) while simultaneously shorting the token on FTX.
.@Bancor halting Impermanent Loss Protection (ILP) was a calculated move @CelsiusNetwork needs liquidity now and so they’ve been withdrawing assets from Bancor, selling their $BNT ILP rewards, and allegedly shorting $BNT on FTX
— ChainLinkGod.eth (@ChainLinkGod) June 20, 2022
Thus, Bancor is disabling ILP until they’re gone https://t.co/Xd0YlM5cIZ
5. Bankman-Fried belies bear, bids for Bitvo. Cryptocurrency exchange FTX agreed to acquire Canadian crypto trading firm Bitvo. The deal, which was announced Friday, is expected to close in the third quarter and will see Bitvo integrated into FTX. In April, Sam Bankman-Fried indicated that difficult market conditions could create buying opportunities and that it “wouldn’t be totally shocking” for FTX to acquire struggling exchanges.
Updates and other stories:
- Celsius says it needs more time to recover financial position...Read More
- Korea bars Terra developers from leaving the country...Read More
- Dogecoin pumps 8% after Elon Musk says he's still buying...Read More
Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN
External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more
3. Crypto Jobs! - looking for a new job? Check out this page from Anthony Pompliano with hundreds, if not thousands of listings
Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant, or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.