Terra, which collapsed two weeks ago, is being rescued. Ethereum’s The Merge update has been rescheduled for August. As many as 44 countries gathered in El Salvador to discuss Bitcoin. ECB’s Lagarde considers cryptocurrencies worthless. Aave launched the Lens protocol.
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Terra’s rescue plan
Terra has been the number one topic in the crypto industry for the past few weeks. Terra’s Luna token and UST stablecoin collapsed two weeks ago, taking tens of billions of dollars from investors’ pockets.
If you want to know everything there is to know about this disaster, check out this article on Terra’s collapse.
Terra’s founder Do Kwon is now trying to save the ecosystem. He wants to create a new “Terra 2.0” blockchain, and the old Terra will be renamed Terra Classic. The plan has been presented as a fork, which would mean a new fork from the current blockchain and the preservation of historical data. However, this is not the case.
This Twitter thread below clarifies the facts. The Prop 1623 proposal would create a whole new blockchain.
1/ Recently, a few community members (including some from TFL) have referred to the proposed new blockchain in Prop 1623 as a “fork” as opposed to a genesis chain.
Note: The revival plan is not proposing a “fork” of the existing chain, but rather the creation of a new one 🧵.
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) May 23, 2022
Not surprisingly, the community voices are strongly in favor of the proposal. Many investors want to recover at least some of their huge losses. The operation will create a new Luna token, which will be distributed to holders of the current Luna token and UST stablecoin at a given point in time (snapshot).
Voting closes on 25 May, one day from now. Currently, as much as 66% of the Terra community is in favor of the proposal, so its approval is almost certain.
The biggest change will be the absence of algorithmic stablecoins. Terra USD (UST) is therefore abandoned as a failed solution. The question remains: what competitive advantages will Terra have over other smart contract platforms?
Founder Do Kwon believes the Terra brand is worth saving. Of course, there is much more built into the platform than the popular Anchor app, which attracted a huge number of investors to invest in the UST stablecoin. Terra’s community (Lunatics) is also undeniably strong. However, the name Terra will forever remind us of one of the biggest disasters in cryptocurrencies.
Time will tell if Terra can still get back on its feet and build a new ecosystem on the ruins of the old. And how much support there is for Do Kwon’s new project?
We’ll have more on Terra in the coming weeks, as new information keeps coming.
The Merge will take place in August
The Merge will be the most important update in Ethereum’s history. It will move Ethereum away from the Proof of Work consensus to the Proof of Stake consensus. The Merge is an important step toward the scalable “Ethereum 2.0”, which will be completed in 2023.
Read more about The Merge update from our comprehensive guide.
At the moment, investors are most interested in the timing. Information on this has been somewhat mixed over the summer. Initially, the update was scheduled to run between June and July, but Ethereum developer Tim Beiko moved the schedule forward a month ago.
Last week we got some new information on the subject.
At the Eth Shanghai Summit, Vitalik said that the Ethereum merge (POW to POS) is likely to happen in the summer in August, If there are some potential risks, September or October is also possible. Live：https://t.co/WSl2IpAyJW
— Wu Blockchain (@WuBlockchain) May 20, 2022
Ethereum founder Vitalik Buterin spoke at the ETH Shanghai Web 3.0 Developer Summit. A link to the presentation is in the tweet above. Buterin outlined that The Merge will take place in August. If problems arise, it can be moved forward 1-2 months.
It was also reported a week ago that Ethereum’s important Ropsten testnet will receive The Merge update on June 8.
There is also a “difficulty bomb” ticking in the background. Its purpose is to make it more difficult to mine Ethereum to the point where mining is no longer possible (profitable). The aim is to stop Proof of Work mining. The Difficulty bomb will be launched in one month and will contribute to accelerating The Merge.
El Salvador gathered dozens of countries to discuss Bitcoin
In July 1944, the world’s leading nations met in the United States to agree on a new monetary system. The place was Bretton Woods, New Hampshire. The Bretton Woods system was born, meaning all fiat currencies were pegged to gold via the U.S. dollar.
Bretton Woods brought together representatives from 44 countries. Last week, representatives from 44 countries gathered in El Salvador to discuss Bitcoin. The number is certainly no coincidence. There were 32 central bank representatives and 12 finance ministers.
The list of countries involved can be seen in the Nayib Bukele tweet thread below.
Tomorrow, 32 central banks and 12 financial authorities (44 countries) will meet in El Salvador to discuss financial inclusion, digital economy, banking the unbanked, the #Bitcoin rollout and its benefits in our country.
— Nayib Bukele (@nayibbukele) May 16, 2022
As you can see, Bitcoin attracted interest from the poorest countries in the world. There was a large number of countries involved especially from Africa. There was also representation from Latin America and Asia.
The meeting in El Salvador was a very different one compared to Bretton Woods. Central bankers stepped to the Bitcoin Beach area, where the Bitcoin revolution in El Salvador began. Everyone got their own Bitcoin wallet and also learned how to make Bitcoin payments.
So far, no major statements have been seen in the news since the El Salvador conference. However, one could bet that Bitcoin will become legal tender in one of the participating countries in 2022.
A month ago, the Central African Republic became the second country in history to adopt Bitcoin as legal tender. Central African Republic uses the CFA franc, which is actually controlled by France. Two similar countries were seen in El Salvador: Equatorial Guinea and the Republic of Congo.
Slightly related to the topic: check out this great documentary on El Salvador by Peter McCormack!
ECB’s Lagarde: cryptocurrencies are worthless
Christine Lagarde is the President of the European Central Bank and one of the best-known crypto critics. When looking at the direction of crypto regulation, we could give the same status of a critic to the ECB, as well as to the EU. Many still remember well the EU vote on the Proof of Work ban a few months ago.
Lagarde appeared on Dutch TV last week and gave her opinion on cryptocurrencies in very clear terms: ‘My very humble assessment is that it is worth nothing. It’s based on nothing. There is no underlying asset to act as an anchor of safety.”
— Decrypt (@decryptmedia) May 23, 2022
At least Lagarde is consistent in her statements, as she has been dissing cryptocurrencies for years. “I’ve said all along that crypto assets are highly speculative, highly risky assets.”, Lagarde added.
The collapse of Terra has fueled the debate on the regulation of cryptocurrencies. Important processes are underway in Europe and in the United States. It is likely that the collapse of the UST will lead to a tighter framework, especially for stablecoins.
Lagarde is also one of the supporters of the ECB’s own digital currency. A consultation on the subject is underway and will end in mid-June. To keep up to date with EU crypto regulations, we recommend you follow Patrick Hansen’s Twitter account.
If you don’t share Christine Lagarde’s opinion that the digital euro is the way forward, you still have three weeks to raise your concerns in the EU commission CBDC consultation – deadline June 14. https://t.co/p5eMF5ySo5
— Patrick Hansen (@paddi_hansen) May 22, 2022
Although Lagarde is an opponent of cryptos, even she is not in favor of a ban. “If you want to invest there, it’s your choice. But, I believe that should be regulated. Those who invest should know. It’s a super risky asset.”
Aave launches Lens protocol
— LensProtocol.lens 🌿 (@LensProtocol) May 18, 2022
Lens is a protocol built on the Polygon platform. It provides tools for application developers to build decentralized Web3 apps. “The last social media handle you’ll ever have to create”, Lens advertises on its website.
The aim is to create an environment where users own their content and their social profile in line with Web 3 ideals. Each social media profile is an NFT that the user can store in his or her own Web 3 wallet. This profile serves as a username for all services using the Lens protocol.
A decentralized environment means that no individual user can be excluded from the service. In addition, it is easy to monetize your own content production, as your own user profile also acts as a crypto wallet.
Stani Kulechov also has first-hand experience of this, as his Twitter account was banned last month. The reason was a joke Stani wrote regarding Elon Musk’s Twitter purchase: “Breaking: Joining Twitter as interim CEO”.
There are already 50 Lens apps being built. We will be following this topic with great interest to see how popular the platform becomes.