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| Terra Ecosystem Revival Plan (Terra): Last week's meltdown of TerraUSD was one of the largest in crypto history. Now, founder Do Kwon has put forth his proposal for bringing Terra back to life.
In simple language, he's proposing:
- Get rid of Terra, the algorithmic stablecoin
- Create a copy (or "fork") of Luna, using a "snapshot" from when the price was still high
- Redistribute these new tokens to the community
In our view, this is like a bank saying "all your money is gone, but we're going to print new money and pay you back."
The feedback to this proposal suggests that Terra has lost so much investor trust that it is hard to see any of them holding onto a new token: most would likely cash out, as soon as it is minted.
This plan is exactly the opposite of what we proposed in Friday's newsletter: keep the stablecoin, back it with real dollars, and pay back investors proportionally to what they held before the crash.
Investor Takeaway: This proposal seems to us like adding insult to injury. Terra investors may wish to use their governance powers to clean house. |
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Ten years ago, the Wall Street Journalpublished this graphic about executive compensation at banks, where their performance was abysmal: |
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| In the new world of crypto, we must ask if the founders of failed projects should be held accountable. When a centralized figure is coordinating the action, should that "crypto CEO" be held responsible?
Terra investors now have the opportunity to put this to the test: if they're unhappy with the current leadership of the six gentlemen on the Luna Foundation Guard, they can vote them out. |
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Hi Everyone,
Hope everyone had a relaxing weekend. After the action we saw in the crypto markets last week, we all needed it.
Yesterday, I put out a tweet thread with a few graphs summing up the action.
We're getting reports now that the Luna Foundation Guard, which was frantically liquidating its bitcoin in a failed attempt to preserve the UST peg, has finally run out of almost all of its cash.
After seven consecutive weeks of losses, the Crypto Fear & Greed Index has finally come off the lows and volatility has come off the highs, according to the Crypto Volatility Index.
But what's this? It's fresh FUD published this morning in the Financial Times, quoting FTX co-founder and CEO Sam Bankman-Fried. |
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| Oh my, what has he done now?
The article quickly drew criticism on Twitter, including input from Jack Dorsey, who co-founded and served as CEO of the platform. |
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| To be perfectly fair, we don't really know what Bankman-Fried said or didn't say, or what the background context was.
The FT article doesn't name a venue for the statements so we can probably assume it was a private conversation.
For all we know, they may well have spoken for four hours about the Lightning Network and other layer two solutions, but Joshua Oliver, the author, put his own spin on the story and very likely took things out of context.
This is nothing new from the FT. Previously when the publication did that I canceled my subscription. I kinda wish I could cancel it again. |
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| Great Bitcoin summit
In any case, the thing to highlight here is not how many transactions per second the bitcoin network can process, but the pace at which it's being adopted.
If the 2017 bull run was about retail adoption and 2021 was about financial institutions, the next bull run will be driven by nation-states. The small ones at first joined first.
El Salvador and more recently the Central African Republic are already using bitcoin as legal tender. Panama will likely be next.
As we speak, there's a great bitcoin summit taking place in El Salvador. The guest list reportedly includes delegates from 44 nation-states, mostly in Africa and South America, who are seemingly considering bitcoin adoption as well. |
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It's a good thing they're doing this now that prices are down rather than buying in at the top of the market. |
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Reflection time
So, I just want to take a moment to point out the miracle of what we just witnessed in the crypto market.
Terra Luna and UST, the two cryptocurrencies that just very publicly and messily blew up, at their peak on April 6, had a combined market cap of approximately $58 billion. This is almost the exact same amount as the market cap of Lehman Brothers at their post-collapse peak.
Terra's collapse may have been terrible for many people, but most of those people are the ones who took the risk to invest in it in the first place. Lehman Brothers, on the other hand, set off a cataclysmic global financial crisis, which some may argue we're still seeing the effects of today.
Which system is better? I'll leave you to decide. But please don't tell me that we need the government's intervention to protect us from personal or systemic risk. This market seems to be doing just fine on its own.
Let's have an awesome week ahead! |
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| Mati Greenspan Analysis, Advisory, Money Management |
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| Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It is created by Evamarie Augustine, Charles Bovaird, Mati Greenspan, John Hargrave, and Alexandre Lores.
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