The next Do Kwon

Meet the new guy in Terra's block

Author

Angelina Berger
July 25, 2023

Welcome back. In case memecoin trading doesn't provide enough of a thrill anymore, some inventive degens came up with a novel way to shake off the bear market lull and make a quick buck: hamster race betting. Gamblers can place stablecoin bets on furry little rodents racing around miniature tracks, all of which is live streamed on Twitch. The future of finance is finally here…

Today: Nasdaq backs out of crypto, introducing Do Kwon’s successor, and a quick market update. Let’s go.

—Angelina

Nasdaq Turns its Back on Crypto Custody

While institutional players like BlackRock are diving into crypto head-first, others like Nasdaq are pulling out. The company behind the prominent Nasdaq stock exchange dropped its plans for a highly anticipated crypto custody service in an earnings call last Wednesday, citing “the shifting business and regulatory environment” in the U.S.

Some background: Nasdaq first revealed plans for a crypto custody solution in September 2022, along with the launch of its crypto business, Nasdaq Digital Assets. The custody service was supposed to go live in Q2 of this year.

A gap in the market: The new product would have served as a solution to crypto’s custody problem, which institutions see as a critical point in the mainstream adoption of crypto in a post-FTX world.

  • Unlike in TradFi, crypto exchanges typically don’t decouple the trading and custody of assets. But offering both functions makes it easier for companies like FTX to commingle and misappropriate customer funds.

  • Nasdaq’s custody service would have offered a solution to this safety risk by acting as the credible asset custodian that crypto so desperately needs.

The good news? It may be abandoning its custody service for the time being, but Nasdaq still appears bullish on crypto as a whole. Nasdaq’s CEO Adena Friedman said her company remains “committed to supporting the evolution of the digital asset ecosystem” by engaging in partnerships with potential Bitcoin ETF issuers and by providing the technology for other crypto custody services.

Big picture: Nasdaq’s decision to pull out of the crypto custody business may not be enough to derail the increasingly positive sentiment in crypto right now, but it remains a strong blow to crypto’s institutional adoption. The move highlights the need for regulatory clarity in the U.S., the lack of which makes it hard for companies like Nasdaq to navigate the crypto sector.

In Do Kwon’s Footsteps

Fresh starts are usually a good way to get over nasty breakups. Terraform Labs hopes that the same goes for burnt crypto companies. The firm behind the Terra ecosystem, which (in)famously collapsed in May 2022, just appointed a new CEO to replace Do Kwon.

Meet the new guy: Terraform labs tapped Chris Amani as its new leader last Thursday. Amani has been with the company since 2021, serving first as its COO and later CFO. And his plans for Terra are ambitious:

  • Amani told the Wall Street Journal that he’s hoping to revitalize the disgraced project by creating applications that “provide real utility”. This doesn’t include the launch of another algorithmic stablecoin to replace the failed TerraUSD token.

  • As of yet, it’s unclear how the pending recovery plan will differ from or build upon the Terra 2.0 blockchain and Luna Classic (LUNC) token, which is still trading for fractions of a penny.

Moving forward: Amani might not be the fresh start that Terra so desperately needs, having been part of the team that was involved in the project’s catastrophic collapse last year. Terra’s disgraced ex-CEO Do Kwon also remains somewhat influential—although he’s currently serving a four-month prison sentence in Montenegro, he still controls 92% of Terraform Labs’ shares.

The Week in Numbers

Looks like altcoin season isn’t back upon us after all. The blistering altcoin rally sparked by Ripple’s courtroom victory on July 13 tapered off last week as crypto markets returned to reality.

Bitcoin and Ethereum entered the weekend slightly lower than they did the week before, dipping 1.5% and 2.5%, respectively. But other tokens proved much more volatile.

The week’s winners: Stellar (XLM) surged some 18%, followed closely by Chainlink’s (LINK) 17.5% and Maker’s (MKR) 13.3% gains.

The losers: The steepest pullbacks last week were led by 1inch Network (1INCH), which dropped 24.3%. Rocket Pool (RPL) shed 15% and Solana (SOL) followed with a 11.2% drop.

In other news:

  • The country of Kuwait announced an absolute prohibition on crypto.

  • FedNow, the Fed’s new instant payments system, could be a serious competitor to stablecoins.

  • Coinbase is shutting down its lending program Coinbase Borrow.

  • SBF allegedly leaked the diaries of his former lover and colleague Caroline Ellison— and the DOJ isn’t happy about it.

  • Crime in crypto is shifting away from Bitcoin to stablecoins, according to blockchain analysts.

Crypto Job Board

  • Web3 gaming creator Zynga is hiring a Marketing Producer to level up the creativity of its projects.

  • Work towards the mission of eliminating financial borders as a Web3 VP of Sales at international fintech Unlimit.

  • Blockchain infrastructure provider P2P.org is looking for a Treasury Manager to stay on top of its crypto and fiat.

And that’s what you need on your radar today in crypto. Are IRL rodent races here to replace the memecoin hype? Shoot me a reply with your musings. Catch you back here next Tuesday!