[Daily] Lido is killing it

Good morning! Welcome to The Daily Moon. Bitcoin hit a new record, but it’s not the price. Non-zero BTC addresses have hit a new peak of 44 million, the first in its 14-year history. All thanks to those Ordinals NFTs.

As of Tuesday, 8PM IST

The markets had a marginal recovery. Bitcoin traded cautiously due to a more-than-expected rise in the January inflation data in the US. Ethereum was slightly above $1,500 despite the adverse news on staking. Nasdaq fell minutes after the US inflation data release.  Back home, Sensex and Nifty gained on a rally in IT and finance stocks.  

Lido Keeps Its Lead

Lido Finance is on a roll. It beat MakerDAO to take the top spot among DeFi protocols in January. And now with a total value locked (TVL) of $7.92 billion, it’s retained the spot. 

FYI TVL is the total funds deposited in a DeFi platform. 

What brought it here?Two things. First is the Shanghai upgrade that’ll let users unstake their ETH. The buzz around stETH, a tokenised version of staked Ether on Lido, has also led to the DeFi’s popularity. Investors want to stake their crypto because they know it’ll not be in limbo forever. That’s why Lido’s TVL has even crossed its pre-FTX values. 

Second, the SEC’s flip-flop on staking has worked in Lido’s favour. Being a DeFi, it doesn’t come under the regulatory umbrella. What’ll probably happen is that users may move their staked crypto from centralised firms to DeFi. And now Lido holds 16.77% share in the ~$47 billion worth crypto staked across platforms. 

Is there a flipside?While Lido’s the leader, its market share has dropped since the May 2022 Terra crash. A possible reason is the decline in the annual returns offered by Lido. From ~10% in mid-November, the returns are down to ~4.8%. 

It’s scared tooAfter the crackdown on staking by licensed crypto companies, Lido is freaked out a little. Its head of business development fears that the SEC may bar all US citizens from staking, even via DeFi. There’s also another risk. Regulatory action may eventually lead to the rise of solo-stakers. But, it’ll be for those who hold at least 32 ETH. 

Curve’s Getting Stable

Amidst the confusion over Paxos’ stablecoin withdrawal, Curve’s made a subtle move. The stablecoin swapping service teased its crvUSD stablecoin. Curve’s CRV  token CRV is up ~14% since the announcement.  

Why now?The SEC is all out to regulate stablecoins. So far, it’s been centralised stablecoins such as BUSD that have caught its attention. This was an apt time for Curve, a decentralised platform, to give a glimpse of its US dollar-pegged stablecoin. The teaser brought sudden interest in CRV, which crossed $1. 

Is it different?Decentralised stablecoins are backed by one or many crypto tokens so that the peg to a fiat currency is intact. In the case of crvUSD, we don’t know how it will work. Curve hasn’t disclosed the reserves and the burn mechanism. Nevertheless the market’s excited. 

Crypto On US Radar

Guess who has reason to dislike US regulators? We know nobody likes them. But hedge funds, private equity firms and pension funds in the US may have more heartburn coming. 

Fresh regulationsThe US Securities and Exchange Commission is reportedly planning to make it harder for crypto firms to be qualified custodians. A five-member panel will vote on the proposal tomorrow.

But what does it mean?It’s tough to say. Because we don’t know yet what the actual proposal is, for one. And secondly, this regulator has been mulling what custody rules should apply in the case of digital assets. Regulators haven’t been particularly crypto friendly so far.

Date Me In The Metaverse

Valentine’s Day is over and Indians are over real world dating. If you believe this survey that is. 

Wut?60% men and 48% women surveyed said they want to try dating in the metaverse. Platforms such as Metavibe, Mingout and SwoonMe seem to be making a mark. 

Who is buying in?The research suggests it’s a way for Indians to escape arranged marriage traps. And also a great way for “shy” ones to find love. Ah well, we think it’s just one way to find less face time with the disappointing in-person dating experiences. Well, whatever works.

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Who are we? This newsletter’s ambition is to educate (and to entertain). The world of money is changing everyday and we want to help you decode what’s happening in the world of crypto, public markets in the US and India.