Tron Feeling the Heat?

Good morning. Another stablecoin could lose its peg, more layoffs from crypto firms, and a little funding for an NFT branding company. The CT5 has all that and more today!

Market Update (as of 9:03am ET):

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Top 5:

1. Tron's algorithmic stablecoin slips further from its dollar peg. The Tron blockchain's native stablecoin, USDD, has drifted off its one dollar peg and is trading around 98 cents. The TronDAO has allocated $700 million in USDC to defend the peg and claims the USDD collateralization rate is now 300%. The move away from the $1 peg has sparked worries that a collapse similar to Terra's is on the way, especially given current market conditions.

2. Cryptocurrency lender BlockFi set to cut staff by a fifth. On Monday, BlockFi's CEO announced on Twitter that the company would be cutting their headcount by 20%. The move from BlockFi follows in the footsteps of Coinbase, Gemini, and Crypto.com who have all announced mass layoffs in the past month. The company had grown from 150 employees at the end of 202o to 850 before the layoffs. Macroeconomic conditions were cited as driving the layoffs.

3. Web 3 service provider ScienceMagic.Studios raises $10.3M from Coinbase Ventures, DCG, others. ScienceMagic.Studios (terrible name if you ask me), a company that creates and advises on NFTs and social tokens, has raised $10.3 million in a pre-seed round of funding. The New York-based firm assists web3 companies in multiple stages of development with branding and creation of digital assets. The funding will help the firm scale to meet demand.

4. Ethereum Core Devs delay crucial 'difficulty bomb' for two months. Last week, the Ethereum core developers decided to delay the "difficulty bomb", which is a crucial step towards the Merge. The difficulty bomb is a means to force validators to accept the Merge when it goes live on the mainnet by exponentially increasing the difficulty of block validation over time. The decision is to delay the difficulty bomb until August 2022 (if everything goes to plan).

5. The Celsius Blowup, Explained. A thread from @JackNiewold. This thread is worth the full read, but I'll provide the TLDR below:

1 -  Celsius makes money by offering yield to customers who deposit funds with them, and then takes that money and runs their own strategies in the background. So, if Celsius offers 5% on USDC deposits and then swaps that USDC to UST to earn 20%, they can keep the 15% difference.
2 - Celsius was a big holder of UST (possibly holding up to $500 million) and was wiped out during the collapse, meaning they lost their customer's money.
3 - Celsius takes ETH deposited by their customers and stakes it with Lido on the Beacon chain. Staked ETH (stETH) is locked on the Beacon chain until after the Merge and has typically traded at a 1 to 1 ratio with ETH. Recently that ratio has changed and stETH is trading below ETH prices. So Celsius is now holding ~$400 million of stETH that is worth less than the ETH deposited by customers.
4 - There are about $10 billion in customer assets on Celsius, and about $1.5 billion accounted for in Celsius' various wallets. With the market downturn, many customers are trying to withdraw funds and Celsius doesn't appear to be fully backed leading to a possible insolvency which could result in bankruptcy.

Updates and other stories:
- Binance paused bitcoin withdrawals due to a ‘stuck transaction’...Read More
- MicroStrategy share price slumps 28% on crypto sell-off...Read More
- Class action filed against Binance.US for sale of TerraUSD...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.