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💣Potential CRV Liquidations Threaten DeFi Lenders
The Defiant Daily
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DeFi lending markets are on edge as the founder of Curve looks to stave off potential liquidations. Meanwhile, the SEC has filed a lawsuit against crypto-entrepreneur Richard Heart and his enterprises alleging misuse of investor funds.
We also unpack the effects of Litecoin's third block reward halving event and what this means for its miners and the overall network. Finally, USDT issuer Tether continues to profit from its massive holdings of US Treasury Bills.
✍️ In today’s newsletter:
- Curve founder scrambles to shore up CRV-backed loans
- SEC goes after Richard Heart
- Litecoin completes third halving
- Tether reports $850M Q2 profit
📈 Markets in last 24 hrs:
| Ticker | Value | 24h |
|---|---|---|
| BTC | $29,233 | ↙ -0.15% |
| ETH | $1,857 | ↙ -0.25% |
| S&P 500 | $4,577 | ↙ -0.27% |
| GOLD | $1,941 | ↙ -1.51% |
| Arch WEB3 | 0.90pts | ↗ +0.57% |
| ↳ FINANCE | 0.97pts | ↗ 1.21% |
| ↳ INFRA | 0.81pts | ↗ 0.23% |
| ↳ CONSUMER | 1.03pts | ↙ -0.63% |
Learn more about Arch Indices here.
🎬 WATCH
Watch our video on the SEC's lawsuit against Richard Heart and HEX. And check out our podcast with Aya Kantorovich, the co-CEO and co-founder of Fractal.
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DeFi Lending
Large CRV-backed Loans Threaten to Destabilize DeFi
TLDR Michael Egorov, co-founder of Curve Finance, has over $90M in outstanding loans across DeFi lending platforms, backed by CRV tokens. The recent exploit of the Curve exchange and the ensuing price drop of CRV has put Egorov's positions at risk of liquidation if prices fall much further. He has been selling off significant amounts of CRV and created a new incentivized pool on Curve to reduce the utilization of FRAX lent against CRV on Fraxlend.
SO WHAT Egorov's predicament underscores the need for effective risk management strategies from DeFi lending protocols when dealing with relatively illiquid collateral assets like CRV.
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Regulation
SEC Alleges Richard Heart Used Investor Funds To Fuel Shopping Spree
TLDR The SEC has filed a lawsuit against Richard "Heart" Schueler and his crypto startups, Hex, PulseChain, and PulseX, alleging multiple unregistered securities offerings amounting to over $1 billion. The SEC accuses Heart of using investor funds for personal luxury purchases and manipulating the market through 'recycled' transactions.
SO WHAT This case underscores the growing regulatory scrutiny in the crypto industry and signals the SEC's ongoing commitment to enforce securities laws in the crypto space.
Markets
Litecoin Completes Third-Ever Block Reward Halving
TLDR Litecoin, one of the earliest blockchain networks, has completed its third block reward halving. This event has reduced the mining reward from 12.5 to 6.25 LTC for every block. Although LTC saw a slight dip following the event, it had rallied 30% in the six weeks preceding the halving.
SO WHAT This halving event underscores the built-in deflationary mechanisms of cryptocurrencies, aimed to curb inflation and potentially spur price appreciation. The event also sets the stage for a transition in Litecoin's network from block rewards to transaction fees as a primary incentive for miners, which could impact its future security and performance.
Stablecoins
Tether Reports $850M Profit In Second Quarter
TLDR Tether, the issuer of the USDT tablecoin, reported $850M in profits for Q2, largely from its Treasury bill holdings, which constitute about 64% of its assets. Despite the bear market, Tether has seen a robust year, with the circulating supply of USDT up 27% to $83.8B.
SO WHAT While Tether's financial growth appears strong, it's worth noting a few contentious points. The company's cash reserves have significantly dwindled, raising concerns among some critics. Although the company is making profits and expanding its investments, the lingering concerns about transparency and the solidity of its reserves could impact its future standing in the crypto market.
