11 May

The Luna Foundation Guard (LFG), stewards of Terra’s UST stablecoin, are looking to raise over $1 billion. LFG will use the cash to help restore UST’s dollar peg. On Monday the algorithmic stablecoin fell as low as 60 cents amid broader crypto market turmoil. It has been around 90 cents on Tuesday.

Jump, Celsius, Jane Street and (perhaps) Alameda are reportedly in talks for a deal that will allow them to purchase LUNA, Terra’s token, at a 50% discount. The tokens would be subject to a one-year lockup and vest monthly in year two.

When UST fell as low as 60 cents on Monday, it sent shockwaves through the entire decentralized finance (DeFi) industry, even sparking comments from U.S. Treasury Secretary Janet Yellen on the risks of crypto stablecoin bank runs.

As UST cratered and the price of LUNA dropped nearly 50%, LFG deployed over $1.5 billion of its newly formed bitcoin (BTC) reserves to defend UST’s peg.”

See Also: UST Resumes Spiral After Quiet Day Orbiting 90 Cents
See Also: UST Stablecoin Veers Wildly From Dollar Peg
See Also: UST Woes Draw Spotlight in Janet Yellen’s Senate Hearing on Financial Risks
See Also: Binance Restarts LUNA and UST Withdrawals After Brief Suspension

After months of rising inflation, a fresh U.S. government report this week may finally show a deceleration in price increases. The U.S. Labor Department is scheduled to publish on Wednesday its Consumer Price Index (CPI) report for April.

Forecasters expect headline inflation to have climbed 8.1% year over year in April, which would be lower than the 8.5% reported for March. Traders [however] will be more closely watching “core” inflation, which is expected to have increased 0.4% from March, signaling higher inflation on a month-to-month basis.

It’s really the core inflation numbers that matter. Issues with rents may be showing up, and so the core CPI may not have peaked.”

See Also: Crypto Market Crash Leads to $1B in Liquidations
See Also: Dapper Labs Debuts $725M Ecosystem Fund for Flow Blockchain Development

“Lawmaker proposals to blacklist non-compliant firms are getting a rough ride as landmark MiCA legislation reaches its final stages.

A proposed European Union ban on crypto providers offering services from tax and money laundering havens raises “serious doubts” and could breach global trade rules, according to a European Commission document. ‘No such prohibition exists in other sectoral legislation,’ and it’s not clear why they should apply only to crypto, said the paper.

Such a prohibition … might create barriers to the provision of services in the EU and therefore might be seen as constituting a breach of international commitments taken at the World Trade Organization.”

“In Cuban’s view, the blockchain projects that purely “copy what everyone else has” by bridging over nonfungible tokens (NFTs) to decentralized finance (DeFi) protocols will die out eventually. Instead, he opined that smart contract platforms geared toward commercial usage and replacing software-as-a-service (SaaS) apps will thrive long term.

What we have not seen is the use of Smart Contracts to improve business productivity and profitability. That will have to be the next driver. When businesses can use Smart Contracts to gain a competitive advantage, they will. The chains that realize this will survive.”

See Also: Bitcoin Exchange Kraken Exploring Stocks as Part of ‘Super Wallet’: CEO Jesse Powell

A Fern Between Two Keys