W3J Daily (9/25): $8.2M worth of collateral was liquidated in DeFi services on ETH drop, Facebook announces plans for massive-multiplayer VR world
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Editor’s Commentary:
The Collapse of Long Vesting 2017-18 Private Sales. Perlin raised its $53.9M private from Dec. 2017 through July 2018, during the peak of the ICO euphoria, and another $6.7M from Binance’s Launchpad last month. It was deemed to be "terrifyingly good" tech at the time. While we are completely neutral on the tech fundamentals and the tech reviews are definitely valid in their own opinions, many ICO investors at the time were not investing for intrinsic value but rather scarcity of getting into the pre-trading private sales before they would usually trade at higher prices on exchanges. The quality tech hype was just another way to create momentum into the exchange listing. A major reason why newly listed alt coins pumped was not because of intrinsic value, but “fear of missing out” in the private sale spilling over into exchanges.
The trend today we’re observing is how seed round buyers and IEO investors have grown to have zero attachment to their investment and are running for the exits with each vesting release. Binance even calls their IEO a “lottery” which further emphasizes the lack of investment attachment for IEO investors. It’s become common for seed investors to sell off their investments even prior to day 1 listing, based on activity we oversee in Telegram. Market making, reducing supply through longer vesting, listing on the biggest exchange possible with most traders and even intense speculator-targeted marketing are not proving to be sustainable strategies to keep up the price from falling.
Rather than playing in a sea of speculators and short-term seed investors, the most organic and sustainable community we’re seeing is when new decentralized web platforms have a reputation for solving a specific part of a decentralized application tech stack. For example, when a developers in the crypto developer community might say, “oh just use Ethereum, Arweave, etc. for that.” Examples, which are completely unbiased in our selection here, might include using Ethereum for smart contracts for lending and collateral, Ethereum for ERC-721 NFTs, Arweave for permanent data, and so on.
We believe we’re still in a transitional period from irrational speculator hype, where intrinsic value was disregarded in the peak of the bubble in favor of playing a game of musical chairs with ICOs, and we’re moving towards realizing and cultivating real value delivered to developers and new types of decentralized applications. While still in the early days, we’re excited to see which projects besides Ethereum cultivate meaningful developer community with the unique benefits of characteristics to their platforms believe that to be the foundational trend for tokens besides BTC in the next alt cycle.
- Andrew and Grigor
W3J Daily Editors
web3journal.com
Top News Of The Day:
$8.2M worth of collateral was liquidated due the ETH drop in price on MakerDAO, Compound, and DyDx, according to DeFi data site loanscan.io. - Link
Facebook announces Facebook Horizon, a social VR world platform coming to Oculus Quest and Rift Platform in 2020. Horizon will be a VR universe where you can build your own environments and games, play and socialize with friends or explore user-generated landscapes. - Link
CoinDesk editor-in-chief Pete Rizzo leaves the publication after a 6 year stint with the company, The Block reports. - Link
DeFi management service DeFi Saver had trouble protecting 2 CDPs from liquidation in time due to network congestion and the quick price drop; the company is offering refunds for the losses. - Link
Nick Tomaino’s 1confirmation fund raises $45M to invest in cryptocurrency startups via both equity and tokens. - Link
Bitfinex earns $34M in revenue in the last three months, based on ~6.7M in LEO tokens burned. - Link
Fold, which offers bitcoin cashback on purchases, raises $2.5M seed from Craft Ventures, CoinShares, Slow Ventures and others. - Link
Binance adds an additional channel to its fiat gateway via partnership with payments processor London-based Koinal which lets users buy 5 cryptocurrencies (BTC, ETH, BCH, LTC, XRP) with debit and credit cards. - Link
Skew, a London-based cryptocurrency derivatives data service, raises $2M seed from Firstminute Capital, Seedcamp, Kima Ventures, Kleiner Perkins and QCP Capital to build out its flagship derivatives data platform, skewAnalytics. - Link
Block.One will establish its headquarters in Arlington County, Virginia, in addition to its 80-person team in Blacksburg, Virginia approximately 250 miles away. - Link
Top Tweets Of The Day:
“Buying an NFT from a web 2.0 @squarespace website using @mintbase -> NFT e-commerce embeddable” - Peter 'pet3rpan' (@pet3rpan_)
“ Beijing crypto whale took a jump after yesterday’s flash crash. Please never invest or leverage more than you can afford to lose.” - Matthew Graham (@mg0314a)
“ CDP #16619 just got liquidated ☠
💳 Debt: 3,278,020 DAI
📉 Liquidation Price: $157.72/ETH
◊ Ether Price: $157.58/ETH
👮 Liquidation Penalty: 426,143 DAI
❌ Stability Fee Write-off: 161,902 DAI” - Maker DAI Bot (@MakerDaiBot)
“Asking for a friend: is there a crypto project that takes Web 2 websites and host them on e.g. IPFS relay nodes for censorship-resistance?
Basically, “decensoring Web 2 websites”? Decentralised VPN?” - Alex Masmej (@AlexMasmej)
“PSA - leveraged tokens are neat in that users don't have to post margin, but remember there are key differences between *opening a 10x long position and holding* and *being 10x long continuously*.” - Jason Choi (@mrjasonchoi) FTX issues a statement re: its leveraged tokens and refunds customers.
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