Monat: Mai 2022

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Bored Ape 1% Club makes me sad I quit my trad-fi job

  • Disastrous Otherside mint leaves many paying thousands of dollars in gas fees without receiving anything
  • Yuga Labs refused to apologise, instead blaming Ethereum and citing the need to create their own blockchain in order to scale
  • The whole episode sums up the growing centralisation of wealth in NFTs, with average investor getting priced out
  • In a lot of ways, the Yuga ecosystem comes across as the exact opposite of what cypto is intending to be

What a circus this weekend turned into in the NFT world, and I don’t mean the good kind (are there any good kinds of circuses? They have always struck me as a bit cruel).

Yuga Labs, the company behind Bored Ape Yacht Club, had its much-anticipated Otherside mint on Saturday night, for the purchase of pieces of land in their upcoming metaverse game. The start-up, who were worth $4 billion before this weekend, had a pretty good weekend by all accounts, raking in approximately $320 million from the mint.

However, the lucrative windfall was the opposite of what transpired for most investors. Due to the colossal demand, Ethereum gas fees spiked into the four-figures, leaving many investors to stump up massive amounts of gas – and still not get land that they wanted.

Predictable Problems

The problem, however, is that everybody knew this was coming. Yuga’s actions were incompetent, and it wasn’t just their egregious failure to optimise the contract. They also abandoned the Dutch auction that had been originally intimidated, amid a total lack of transparency, and announced the mandatory ApeCoin purchase late.

Furthermore, they failed to prevent the mass farming of KYC wallets. Perhaps worst of all, they donated 15k to their investors, again amid a lack of transparency, which quashed the supply even more and spiked up the gas even higher. All this led to an entirely predictable gas war and many hopeful newbies losing thousands of dollars.  

While Yuga have said they will refund gas to those who had failed transactions, that doesn’t help the thousands who could not secure land – as the company has refused to allow those who missed out preference in any ensuing sale, a move seen by lots in the community as very unfair.  

But the fallout runs deeper, unfortunately. $100 million in liquidity was sucked from the NFT space, as traders sold their assets in order to stack up on the colossal amount of ETH required to purchase a plot (and also pay for gas). Etherscan crashed with all the activity, and Solana also suffered an outage due to the cascading failure of the blockchain’s validators, following a flood of bot activity after the mint. NFT collections elsewhere on Solana and Ethereum also saw prices drop as traders sold en-masse to get the funds in their wallets for the mint – a mint which then preceded to exclude many.

Yuga Fail to Read the Room

The lack of transparency, consideration and plain old empathy from Yuga was pretty sad to see. Even worse, after being silent through a good portion of the catastrophe, they put out the below tone-deaf tweet, showing they have completely lost touch with the average investor. Refusing to apologise, they instead blamed Ethereum for the whole mess, asserting that they require a chain of their own to continue their grand ambitions for Web3 dominance.

Anybody remotely familiar with crypto could have predicted this in advance, however, and the real blame is on Yuga for failing to optimise the contract. Their solution now is to create some sort of “BSC-style”, centralised blockchain, and expand their empire and power even more in the space?

As a reminder, this company already have the biggest NFT project on the planet in Bored Apes, the intellectual property rights to the second biggest collection in CryptoPunks, and their own coin with a market cap of over $4 billion.  Now, they want their own blockchain, too?

Ethereum has problems, I won’t deny that, but with the Merge coming they are at least working on it. Not to mention the size of the community and the sheer number of incredibly intelligent individuals working on it. What exactly have Bored Ape Yacht Club done for the community? What has Yuga Labs done?

Centralisation of Wealth

It’s the latest episode that highlights quite how exclusive the NFT world is becoming. What average investor has the means to stump up four-figures in gas, plus the price of the actual land (which was 305 ApeCoin, worth $7,000 on Saturday) for the chance to enter the Yuga club? Increasingly, this is becoming a playground for the egregiously rich, where the consolidation of wealth is getting dizzier by the day. Sadly, that’s the exact opposite of what so many people love about crypto – a more democratic, fairer, and accessible monetary infrastructure.

Additionally, many traders bought Yuga’s ApeCoin in order to make the purchase. ApeCoin, you may remember, was airdropped to all holders of Bored Apes in March. 10,094 coins appeared in each holder’s wallet, which is equivalent to $150,000 at current prices. Of course, already owning an Ape, which currently has a floor price around $300,000, means those who got airdropped the ApeCoin were already doing “well”.

Not to mention the fact that the tokenomics of ApeCoin are very lobsided, with 15% of supply retained by Yuga Labs, 14% going to BAYC founders, 15% to the first BAYC owners, and 8% who worked on the DAO launch. For those counting, that adds up to over half the supply.

This week’s Otherside mint was meant to finally be a route for “normies” to enter the ecosystem. Yet most were unable to do so due to the gas war, and more were further hurt by the fact that ApeCoin plummeted 40% after the mint issues. The bagholders there, of course, are those same normies who failed to convert that ApeCoin into what they wanted – Otherside land.

Anti-Crypto

As I said above, crypto was meant to be a fairer system; a more accessible, open and democratic monetary environment. Tell me, what exactly is fair here? A browse on Twitter will see Ape holders lambasting those complaining about Saturday’s mint for not having the courage or means to pay the gas elevated gas fees. HFSP, or NGMI, are the common acronyms to those who failed to secure a plot of land. I wonder how different their attitude would be had they not got their hands on an Ape before the price rocketed up to where it is now.

As a diehard crypto fan, who spends half his time defending the industry to sceptics in trad-fi and beyond, it’s an upsetting day. It’s symbolic of one of the oft-criticised features of crypto – the centralisation of wealth. This was always meant to be the place for the underdog, where anybody could make themselves into a somebody.

Signing Off

I’ll likely be written off as a disgruntled nobody; a normie who is sad they don’t have a piece of the BAYC empire. Honestly, that’s kind of true – I own no part of Yuga, and I am sad, but not for that reason.  I’m sad because I love crypto, and I love the opportunities it presents. What I see in Yuga right now is the opposite of what gets me so excited to be in this space; the opposite of why I quite my trad-fi job to make the leap across. 

Sure, it would be nice to be in the Bored Ape Yacht Club for financial reasons. But right now, it’s more like a Bored Ape 1% Club. 

I may be staying poor, but at least I’ll have fun doing so.

The post Bored Ape 1% Club makes me sad I quit my trad-fi job appeared first on Coin Journal.

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Ethereum price prediction for May 2022

Ethereum price has gone nowhere in the past few days as investors eye the upcoming interest rates decision by the Federal Reserve. The ETH token is trading at $2,805, which is slightly below this week’s high of $2,883. Its market cap has dropped to about $340 billion, meaning that investors have lost over $160 billion of value recently.

Ethereum April review

Ethereum had a relatively uneventful performance in April. The biggest announcement was that the developers were postponing Ethereum merge date from June this year to the third quarter. Analysts expect that the current network and the Beacon Chain will now merge in August or September. 

The merge delay was a disappointment to many people. However, many investors believe that it was a necessary action because of the significance of the upgrade. Historically, a single era in a blockchain network like Ethereum has led to major hacks. 

Read more about how to buy Ethereum.

Meanwhile, like other chains, Ethereum saw an outflow of total value locked (TVL) in its network. In the past 30 days, the TVL has dropped by more than 11% to about $110 billion. It nonetheless managed to grow its dominance in the industry to 55% as other chains saw a deeper decline. For example, Solana and Fantom declined by over 25%.

Ethereum’s price action also mirrored that of other assets. In April, the Nasdaq 100 declined by more than 18%. In the same period, US bond yields continued rising as the sell-off continued. Bond yields have an inverse relationship with prices. Indeed, in April, the yield curve managed to invert to the lowest level since 2007.

This price action was mostly because of the words by Fed officials. In speeches and statements, officials like Jerome Powell and Mary Daly hinted that the bank will continue hiking rates. Expectations are that the bank will increase rates by 0.50% and start quantitative tightening. 

Ethereum price prediction

The four-hour chart shows that the ETH price has been in a steady downward trend recently. It has managed to move below the standard pivot point and the 25-day moving average. Also, the Relative Strength Index has moved slightly below the neutral level at 50. 

Therefore, I believe that the Ethereum price will decline modestly in the first part of May and then start bouncing back since the hawkish Fed situation has already been priced in. Therefore, a bounce to $3,200 can’t be ruled out.

The post Ethereum price prediction for May 2022 appeared first on Coin Journal.

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Kraken opens waitlist for its NFT marketplace

Kraken NFT marketplace will reportedly allow zero gas fees on all NFT trades on the platform.

Major crypto exchange Kraken has announced that the waitlist for its non-fungible token (NFT) marketplace is open.

The announcement, published on Tuesday, comes a few months after the US-based cryptocurrency firm revealed plans to launch Kraken NFT. This will be the crypto exchange’s NFT marketplace that’s being highlighted as a “complete solution” for users seeking to explore, trade and secure NFT collections.

Zero gas fees for on-platform trades

Among the many features, users are set to benefit from when using the new NFT platform is what Kraken says is “zero gas fees” on all trades involving NFTs custodied on the platform.

“Once your NFT is custodied with Kraken NFT, you will not pay any blockchain network fees for trading activity that takes place within our platform,” the Kraken team said in a blog post.

According to the exchange, users will only pay gas fees when they transfer NFTs onto or off the marketplace.

Use cash or crypto

Kraken NFT will offer users access to the buying and selling of NFTs via cash or crypto, whichever the customer prefers. This, according to the platform, will occur via seamless integration of the NFT account with a customer’s Kraken account.

In this way, offers can be listed in fiat currencies such as USD, EUR, and GBP, among others. Users will also have access to over 120 cryptocurrencies.

Other features include multiple blockchain support

Kraken NFT will eventually support several blockchains, but the initial launch, according to the team, will involve Ethereum and Solana support.

Apart from supporting multiple blockchains, the marketplace will also integrate the security protocols and measures applied on the main network to secure the NFT platform.

Meanwhile, NFT creators on the platform will benefit from a reward system that assures them a cut of earnings made in secondary sales. This will work via a feature dubbed Creator Earnings.

Kraken NFT Marketplace will join a list of other NFTs platforms from major cryptocurrency exchanges, including Coinbase, Binance, FTX and KuCoin.

The projects are coming up thick and first as the NFTs space continues to experience rapid growth. The industry saw billions of dollars worth of digital collectibles traded in 2021.

The post Kraken opens waitlist for its NFT marketplace appeared first on Coin Journal.