[Daily] Has Cardano been set free?

Good morning! Welcome to The Daily Moon. FTX has run out of ideas to exit bankruptcy. The collapsed exchange that pumped millions into US political parties wants the money back. FTX wants the funds returned by the end of February, or it’ll sue.

As of Monday, 8PM IST

The markets were in the red. Bitcoin was below $23,000 and Ethereum slid to $1,630 levels. Nasdaq fell in early trade. Back home, Sensex and Nifty ended lower on weak global cues.

Djed Unlocks ADA

It’s been a week since a new stablecoin, Djed, was launched on the Cardano ecosystem. This was probably the change that Cardano waited for. Djed’s entry means another source of revenue for Cardano. ADA gained indirectly.

First, how’s Djed different?Djed is a stablecoin but different from Tether, USDC and the like. It’s an algorithmic stablecoin, so an algorithm decides its worth. Djed is linked to Cardano’s ADA token and has nearly six times the reserves. To simplify, each Djed is backed by six times its value in ADA tokens.

FYI TerraUST was also an algo stablecoin. But it crashed because the reserves weren’t really there.

What’s the big deal?Cardano struggled with the funding rate so far. Liquidity dried up in the network so ADA was stagnant at $0.30 for a while. When FTX went bust, Cardano was dragged down too. From thereon, it was stuck in a rut. Then came Djed. The stablecoin brings two changes to Cardano:

1. Decentralisation: Stablecoins still depend on government-owned currencies and bonds. Djed will be fully decentralised since it’s supported by ADA. Djed also has a reserve currency called SHEN. ADA’s use-case increases because it is responsible to ensure that 1 Djed=$1.

2. Transaction token: All transaction fees on Cardano will be paid in Djed. This means that the gas fees will remain more or less constant. Decentralised apps on Cardano will also switch to Djed.

How has ADA moved?ADA has seen ~40% increase in volumes since Djed’s debut. As more Djed get minted, there’ll be more ADA in collateral. It’s a win-win for Cardano.

Little Shapes’ Little “Experiment”

You may have heard of scammy NFTs. But Little Shapes NFT took it one step further. Its creator Atto (not his real name) has said that the project was a “social experiment” to expose NFT bots. Mind=Blown.

What happened?Atto and his team found vague NFT projects that got a lot of social media attention. How did it matter to him, you’d ask. It did because a lot of people buy NFTs based on their popularity. So, he tried a little experiment to push a fake NFT collection called Little Shapes. In days, this collection was everywhere. The reality, however, was different.

How did it work?Little Shapes needed a sob story, so Atto created a bunch of them. In the last week of December, he started to put out weird tweets about his life.

Little Shapes was then presented as an avatar-style project where the NFTs changed in real time. Media hyped it. Bots retweeted all the Little Shapes NFT whitelists. Ultimately, Atto pulled the curtains.

Oh and if you bought any of it, the money will be refunded.

Is Sol Running Out?

Solana has been climbing the charts for the past few weeks. After taking a beating when FTX crashed, the token went from $9 to upwards of $25. But something is changing in the way the token is being traded to indicate this rally may be short lived.

Now what?No scandals. Not that we know of anyway. But trading patterns such as the Relative Strength Index indicate that the price may slide soon.

Jargon busting timeRSI is a technical measure traders draw to analyse a financial instrument. It ranges from 0 to 100. An RSI of 70 will indicate that the token, in this case, is overbought and 30 indicates that it was oversold.

But…Nothing is certain when it comes to the market. If Bitcoin continues to soar, it will be the tide that lifts all boats. There is development activity on the Solana network so there are underlyings that point to the right direction.

China Won’t Give Up On CBDC

China will not stop until its populace accepts the digital yuan. The country launched the CBDC in September last year and since then the reaction by its citizens has been a collective meh. But things change.

What changed?Money. The country has been giving away millions of digital yuan to its citizens and businesses to encourage them to transact using the CBDC. Some cities have given away over $25 million in yuan. And there has been an uptick. People have started spending that money.

There’s more to itChina’s badly thought out zero Covid policy had caused a lot of chaos. This is a subtle way of giving cash to people who have run out of money.

Will it last?That’s the question that remains to be answered. Will people stop once they’ve spent the free money or will they continue to use it because of habit formation?

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