This Solana story is WILD
GM, we take the latest Web3 news and translate it into plain old English - so you can stay up to date, without your eyes glazing over.
In today’s edition:
A single trade threatens Solana - and some WILD solutions are being suggested...
The rise of ‘wholecoiners’
RESOURCE: What are Unstoppable Domains? (Learn in 13 mins)
Surprise! Michael Saylor wants the government to favor BTC over other cryptos
Terms used (click for translation):
DAO, dApps, DeFi, Wallet, Web3.
A single trade threatens Solana - and some WILD solutions are being suggested...
Alright, this linked article is a minefield of weighty terms...
"Solana Lending DAO Overturns Vote to Take Over At-Risk ‘Whale’ Wallet".
No one has time for that. Here's what's happening:
A single investor put down $170M worth of Solana (SOL), in order to take out a loan on Solend (a lending program built on the Solana Network).
They have an open trade that might be about to be liquidated.
Meaning, that ~$20M of that $170M deposit will be sold off, unless this investor closes the trade...only thing is, they're not budging.
Here's how this affects Solana as a whole:
If you sell a whole bunch of a particular crypto at once, it can impact that coin's price.
The math on that looks like this: selling pressure = price drop.
In this case, $20M worth of SOL being dumped on the market at once, could cause a cascading sell off and wipe Solana out.
The issue was so dire that the Solend team reached out to the investor in question, asking them to restructure their loan, because:
"It would be difficult for the market to absorb such an impact"
The investor's response: *crickets*.
Here's where the story gets WILD.
The Solend team proposed they literally steal the investors funds and close the trade, to avoid the crash of Solana.
The proposal read like this:
"Grant emergency power to Solend Labs to temporarily take over the whale’s account so the liquidation can be executed OTC and avoid pushing Solana to its limits."
The Solend team put it to a vote through their DAO, giving only 6hrs for folks to vote (during which, the voting site was 'down' for 3hrs).
The 'community' voted yes, but it was fishy.
Not only was the voting site mysteriously down for 3hrs, but a single wallet controlled 98% of the 'yes' vote.
Meaning one entity controlled the decision.
There was fierce backlash from the crypto community, many saying it was not only immoral, but illegal.
Yesterday, Solend asked users to vote on overturning the earlier vote, which received an overwhelming 99.8% “yes” votes.
...so, what now?
It's all a little murky.
The Solend team is looking to come up with “a new proposal that does not involve emergency powers to take over an account.”
But can such a solution be found, without the involvement of the account owner?
No idea. Guess we'll find out in the Netflix special.
The rise of ‘wholecoiners’
The crypto community loves a good abbreviation.
(an 'abreev', if you will)
‘Wholecoiners’ are people who own 1 full Bitcoin. And the amount of them is increasing. Rapidly.
Over the past week, the number of Bitcoin wallet addresses containing one BTC or more has increased by 13,091.
Want a graph? Here's a graph!
Cool, more wholecoiners...
What does this mean for Web3?
It’s a sign that, while some people are getting out of the space, others are doubling down.
More wholecoiners, means more overall trust in BTC. More overall trust in BTC, means price stability and potential increase.
...and when Bitcoin goes up, it usually takes the rest of Web3 with it.
An increase in trust, as the market struggles?
We'll take it!
Resource of the day
What are Unstoppable Domains?
(Learn in 13 mins)
Surprise! Michael Saylor wants the government to favor BTC over other cryptos
Michael Saylor is the Regina George of crypto.
He brings big 'you can't sit with us' energy when talking about anything that isn't Bitcoin.
So much so that he's calling on the government to take aim at a wide ranging list of crypto projects (over 19,000) that he lovingly refers to as the “parade of horribles”.
“What you have is a $400 billion cloud of opaque, unregistered securities trading without full and fair disclosure, and they are all cross-collateralized with Bitcoin”.
Translation:
'There's $400B worth of crypto projects, that all essentially rely on the success of Bitcoin (because when BTC goes up, so does everything else).
...but a lot of these projects are shady as hell, which makes Bitcoin look bad...so let's regulate them.'
What is old Micky Saylor's vision for regulation?
Ideally, he wants to see Bitcoin (and maybe Ethereum) be recognized as commodities, and everything else to be considered a security.
What's the difference?
Here's a quick copy/paste from an article we wrote a few weeks back:
A security can be shut down, broken up or dissolved by the government.
(E.g. If Apple started making nuclear weapons, the government could/would come in and shut them down)
A commodity can be banned by a government, but it can't be stopped from existing.
(E.g. A government might ban the trade/use of oil, but oil will still exist).
Why does it matter?
Securities = more government oversight
Commodities = less government oversight
If Bitcoin gets classed as a commodity, while all other coins get marked as a security - it's going to be GREAT for anyone holding Bitcoin in the long term.
Q: What has two thumbs and owns 129,218 BTC?
A: This guuuy.
Your Daily Dose of Web3
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Alright, that’s it for today!
Love to the family,