Welcome to Around the Blockchain, Huobi Learn’s daily rundown of the crypto markets.
Lawrence Livermore National Laboratory researchers have designed the Electricity Stablecoin (E-Stablecoin), a stablecoin that transmits energy as a form of information. This allows for electricity transmission without physical wires or a grid, and creates a fully collateralized stablecoin pegged to a physical asset whose value depends on its utility. The E-Stablecoin will be minted via one kilowatt-hour of electricity (plus a fee) and can be used for transactions like any stablecoin. Alternatively, the energy can be extracted by burning it, also for a fee. The entire process will be smart contract-controlled with a decentralized data storage cloud.
Yesterday’s heavy crypto market sell-off has affected both DeFi and CeFi protocols. For instance, Aave’s utilization rates have dipped across almost all stablecoin loans — those for BUSD, for instance, are now at a mere 30% compared to their 80% high just last month. Total value locked (TVL) in DeFi protocols has declined by 55% since end-April, thanks partly to capital flight and the lowered value of digital assets. The remaining $115.7 billion in TVL represents a mere fraction of Nov 2021’s $303.9 billion peak.
A class-action lawsuit has been filed against Binance US, alleging that it misled investors, sold unregistered securities to around 2,000 plaintiffs, and marketed UST as a fixed USD-pegged stablecoin. The lawsuit shows Binance ads promoting UST as “high-yield, safe” and “fiat-backed”. It further claims that the exchange failed to disclose that UST was “in fact a security”, causing “disastrous consequences” for its customers. And while Binance removed the ads after UST’s collapse, it “blithely added insult to injury when…it began selling Luna 2.0”.
Crypto lending firm Blockfi announced yesterday due to the “negative impact” of “market conditions” on its business, it would be laying off “roughly 20%” of its staff. Co-founders Zac Prince and Flori Marquez said, “We are doing everything in our power to treat all of our impacted colleagues with the empathy and compassion that they deserve.” They added for their “remaining 600-plus colleagues” and their “clients, partners and stakeholders”, they were “steadfast” in their “commitment to ensure Blockfi is here for the long haul”.
Amid the continuing crypto market downturn, Bank of England (BoE) Governor Andrew Bailey has reiterated his anti-crypto stance, saying it has “no intrinsic value”. This came after UK-based crypto lending platform Celsius suspended transfers and withdrawals, driving the values of BTC and other cryptocurrencies down. Testifying in Parliament, Bailey referred to this as “another blow-up in a crypto exchange”, adding to his previous warnings about crypto and criticism of BTC as not being a practical means of payment.
Despite the ongoing “crypto winter”, a Bank of America survey of 1,000 people conducted this month found that 90% of respondents were preparing to buy crypto within the next six months. At the same time, the number of respondents who already owned crypto was similar to that who intended to buy. 30% said they had no intention to sell their crypto over the next six months in spite of the continued bearish trend, while 39% said they used crypto for online purchases.
Show me the money
BTC has crashed to $22,515.20, its lowest level since end-2020. This represents a dip of over 60% in the past seven months and 7.01% in the past 24 hours, while ETH fell 3.1 in the last 24 hours to $1,191.24. But even as many crypto holders began liquidating their assets, Celsius has temporarily paused withdrawals.
Meanwhile, Binance has blocked BTC withdrawals, claiming that a stuck transaction caused a backlog in its systems and made it unable to fulfil customer’s requests. CEO Changpeng Zhao tweeted that their funds were safe and that the problems would take a half-hour to fix, but later said it would “take a bit longer…than my initial estimate”. He also restricted replies to his tweet so only those he followed could publicly respond.