[Daily] Calm down Arbitrum

Good morning! Welcome to The Daily Moon. A book on Bitcoin’s “soft power” is an instant hit on Amazon. Softwar, penned by US Space Force Major Jason Lowery, talks about how Bitcoin can be used as a system to lock away information from bad actors on the internet. That’s a use case no one saw coming. 🤯

As of Monday, 7:30PM IST

The markets were shaky as rate hike concerns continued. Bitcoin was bearish due to slowing trading volumes. Ethereum saw profit booking among investors. S&P 500 and Nasdaq moved in opposite directions amidst volatility in technology stocks. Back home, Sensex and Nifty ended higher on buying in auto and banking stocks. 

Arbitrum Has A Plan B

Arbitrum has been hurting and the life of its investors got messier over the weekend.  The blockchain wanted the Arbitrum Foundation to control 750 million ARB tokens worth $1 billion. The community opposed it, but the Foundation still sold 50 million tokens. 

What happened?The blockchain tried to make an abrupt decision to hand over powers to the Arbitrum Foundation. What annoyed the community was that they weren't consulted before drafting the proposal. An overwhelming majority (~83%) of token holders rejected the proposal. Let’s break it down: 

1. Arbitrum released its governance token ARB on March 23. Those airdropped ARBs expected to have a say in governance matters. 

2. The new proposal stated that the Arbitrum Foundation would get total control of ARB tokens worth $1 billion. 

3. It gives powers to the Foundation to hold, sell, or distribute the tokens. 

Before things went further downhill, Arbitrum clarified that this new proposal would be “broken up” into several proposals and put for voting again. 

But what about ARB?The token’s in a spiral. The community is waiting for the revised plan of action, but until then, the investors who have decided to HODL are bleeding. 

Did Biden Save Stablecoins?

A few stablecoins de-pegged between the collapse of Silicon Valley Bank and its subsequent revival. Now it appears the US government’s actions may have inadvertently saved stablecoins. 

Wait, what?During a bank run, funds stay in limbo for ages, but in SVB and Signature Bank’s cases, the US government stepped in and enabled instant recovery. Circle was able to withdraw its $3.3 billion reserves and transfer them to BNY Mellon. That’s why USDC gained its peg soon after. 

A balm to calm nervesStablecoins, in particular, have found favour among nervous investors who want an alt to TradFi. The fact that stablecoins are linked to fiat currency gives a sense of comfort. The only thing missing is FDIC insurance. Maybe soon.

Hong Kong And Crypto New Friends?

The world is dealing with crypto in its own way. The US is taking slightly antagonistic positions after the FTX collapse, which means companies need a new home. And they seem to find it in Hong Kong.

More favourable to cryptoSo Hong Kong, which had kind of fallen off the crypto world’s radar post-pandemic, is making the most of the situation. And from what we know, it’s working. Over 20 firms from mainland China, Europe, Canada and Singapore want to move here. And more than 80 have shown interest in moving East. 

Slow and too cautiousCrypto companies in the UK seem to face the same issues as the US. Banks are making it difficult for crypto businesses to access their services, which is at odds with Prime Minister Rishi Sunak’s vision. 

Interesting for ChinaChina has been vocally against crypto banning everything from trading to mining, but it is trying to revive Hong Kong as the financial capital of the East once again. The protests in the city had persuaded capital to leave the region, but the hope is it will return once China has softened its stand. 

AI Nightmares

ChatGPT didn’t have the best weekend. Italy’s data protection regulator banned the chatbot. Unfortunately, this is just the tip of the iceberg. 

Why the ban?Well, several reasons. One is to check if it complies with the European Union’s data protection regulations. Then there is a fear that chatbot is being trained on personal information. 

What’s with the paranoia?It may seem like an extreme move, but the fears aren’t unfounded. You’ve seen enough Black Mirror to know. It’s not just fictional scenarios anymore. Ask this Belgian woman whose husband died by suicide after an AI chatbot convinced him it was the best thing to do. For climate change. Research into “mind reading” AI is also moving ahead. 

It is brand-new technology and regulators will need to step in before Skynet is a reality.

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