Polygon’s big flop

Good morning! Welcome to The Daily Moon. Australia is managing to be the most progressive country when it comes to crypto. The country announced that it will be launching a stablecoin, which will be backed by the Australian dollar. No looking back here.

The markets were in the red. Bitcoin slid to ~$20,750 and Ethereum edged towards $1,500. Nasdaq fell in early trade. Back home, Sensex and Nifty ended lower as the US markets tumbled.

Polygon’s Fork Rally Fizzles Out

Polygon entered this week with a 20% rally ahead of its hard fork. But now that it’s complete, the rally seems to have vanished. MATIC is down more than 5% and slipped below $1.

What the fork?It isn’t MATIC’s fault alone. The crypto market fell after a false alarm about “big action” by the US Justice Department. Everyone speculated what the action will be, from a stablecoin ban to an all-out crypto ban. It turned out to be a damp squib when the DOJ announced enforcement action against a little-known crypto exchange. But, it was enough to spook the markets.

Didn’t the fork work?It did. But probably that wasn’t sufficient to hold on to the gains. Also, there was some chatter around how the hard fork wasn’t really decentralised. Here’s what happened:

1. A month before the hard fork, the community had a fiery debate about the need for a drastic hard fork.

2. Polygon leadership rejected objections. Strangely, instead of a community vote, only 100 validators were asked to participate.

3. Eventually, just 15 validators voted. Out of these, 13 voted in favour of the fork.

Meanwhile…Polygon will soon announce the date of the mainnet launch of ETH scaling solution.

ETH’s Report Card Is All Red

Ethereum ended 2022 on a bad note. An analyst report showed a decline almost across the board. There was a fall in network revenue, DeFi activity, stablecoin supply, and NFT trades in the fourth quarter of 2022.

What do the numbers say?It doesn’t look good. Here is a glimpse:

• Network revenue dropped ~94% to $267.8 million in Q4 compared to a year ago.

• DeFi TVL fell ~76% to $23.2 billion. TVL or total value locked is a measure of a DeFi’s crypto funds.

• Layer 2 TVL slid ~29% to $4.1 billion because of the crypto winter.

• Stablecoin supply fell ~6% to $85.7 billion because of redemptions.

• NFT trading volumes fell ~64% to $2.6 billion due to a larger NFT fatigue.

But it isn’t all badThere was a ~105% increase in liquid staking deposits to 7 million. That’s the amount of ETH deposited into staking protocols. It’s a post-Merge effect.

It’s Meme Season

How do you decode a boom period when it comes to crypto? TVL? Price differentials? Don’t be a nerd. It’s meme coins. Crypto has emerged from one of the most savage periods in its short history and the memers are at it again.

What happened now?Doge, Shiba Inu, and Bonk (sigh) have accounted for trading volume, which totals $25.6 billion in January alone. Doge tops the charts with $17.5 billion in trading volume, Shiba Inu comes in next at $7.2 billion and Bonk, latest in the kennel, with $885 million.

What does this mean?That depends on you, the user. If you think there’s value in these tokens except the, lol, trade. But just as an FYI none of these tokens have ever gotten even close to being worth pennies. Doge reached 73 cents back in 2021 when self declared Dogefather was called on SNL and people thought it was funny. 🙄

Genesis: Pre-empting Bankruptcy

The creditors of almost-bankrupt Genesis are trying to come up with a plan so they are assured some returns when the company finally goes belly up.

But the company isn’t bankrupt yet

It isn’t bankrupt in name but all signs point to a Chapter 11 filing. The creditors, including Gemini, are trying to come up with a plan that will put them in front of the queue for payouts when the papers are filed. The plan will also give Gemini equity in the company’s parent Digital Currency Group.

What of the users? 

Lol.

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