Celsius Just Dipped By 32% Due To Ripple Effects After Terra Collapse.

Terra’s woes appear to affect other crypto projects in the industry. Apparently, Celsius, which is the native token on the Celsius Network, has experienced a 32% price drop due to fears that it might undergo what Terra underwent a few weeks ago.

At the time of this writing, data on CoinMarketCap indicate a 32% price decrease for Celsius (CEL). The coin is currently trading at around $0.44.

Unrealistic Rewards

The fear is primarily fueled by the high rewards promised by the Celsius network, raising questions about the sustainability of the system. Celsius promises as high as 30% weekly returns on investments. While this may have contributed to investor pessimism, it’s still not clear what exactly led to the sudden price drop of the CEL token. Such price movements are often caused by sudden whale action or general market changes in the wider crypto industry.

Investors’ Appetite For High-Yielding Protocols Has Decreased

Since the Terra ecosystem collapsed in May, investors have largely avoided crypto projects promising extremely high rewards. Before its collapse, Terra was dishing out 20% ROI to those who invested in UST. These rewards are often pointed out as one of the factors that caused Terra’s downfall. This is why investors may be wary of the 30% rewards promised by Celsius.

“We Are Undoubtedly In A Crypto Winter”

However, the company (Celsius Network Ltd) was quick to note that it took measures early enough to prevent an adverse circumstance such as what befell Terra. It also noted that Celcius isn’t the only crypto being affected by the current crypto winter.

Its press statement read,

“Looking across the entire crypto sector, we are undoubtedly in a crypto winter. The price of all cryptocurrencies have clearly been affected by a general market downturn. We are squarely focused on building for the long-term.”

User activity on Chainlink bolstered after the project announced plans to launch a staking program.

The number of active Chainlink (LINK) addresses have increased massively in the past week, following the introduction of the staking program for the cryptocurrency project.

According to data on popular cryptocurrency aggregator platform Messari, the number of Chainlink active addresses has surged tremendously between June 3, 2022, and June 10, 2022.

On June 3, 2022, the number of active addresses on Chainlink was around 1,582. Following the announcement of staking rewards for LINK holders, active addresses on the network continued to grow steadily, reaching nearly 2,300 in the past seven days, thus representing a 44% growth.

Please note that active addresses are different from holders. According to Etherscan, ChainLink has 669,109 holders.

Positive Contributions to LINK’s Value

Although the number of active addresses on Chainlink is nothing compared to its highest in the past month when about 5,884 active addresses were recorded, the development is still commendable.

This is because an increase in the number of user activities on any cryptocurrency project usually bodes well for the value of the coin associated with the project.

The same thing was noticed in the price of LINK, the native cryptocurrency of Chainlink. Per data on cryptocurrency aggregator platform Coingecko, the price of one unit of LINK has surged 23.2% in the last seven days.

Within this period, LINK saw its price move from a low of 6.79 to a high of 9.46. Although the value of LINK has slumped a bit due to the current downtrend of the crypto market, the asset class’s value is still fair compared to what was recorded earlier this week.

At the time of writing, LINK is changing hands at $8.85, down 4% in the last 24 hours.

Chainlink’s Upcoming Staking Program

Meanwhile, Chainlink is planning to reward LINK holders with a 5% APY. The team behind the project announced this in a blog post this week, saying:

“A new era of sustainable growth and security – Chainlink Economics 2.0 – begins with staking.” The initiative was launched to support the network’s safety as community members will be required to engage their LINK tokens for a reward when staking is officially unveiled.

At the moment, no specific date for the project’s official launch has been made; however, Chainlink is planning to launch the first version of the staking program (v0.1) in the second half of this year.

Optimism (OP) Hacker Transfers Another 1M To ETH Founder But Confirms To Return Remaining 18M Coins.

The hacker who exploited the technical glitch on Ethereum Layer-2 scaling platform Optimism and seized 20 million units of OP tokens, has sent another one million $OP to Vitalik Buterin, the co-founder of Ethereum.

The development comes less than 24 hours after the attacker transferred 1 million OP tokens to the co-founder of Ethereum.

Following the development, the attacker has transferred a total of 2 million units of OP to Buterin, thus implying that the hacker is still left with 18 million OP tokens in his wallet.

Interestingly, the hacker added a message in the second transfer to Buterin, stating that the 18 million OP tokens will be returned.

The development was first reported by Twitter-based crypto media outlet Wu Blockchain, noting that:

“The OP hacker address 0x60B28637879B5a09D21B68040020FFbf7dbA5107 sent another transaction to the Vitalik wallet, and left a message saying that 18 million OPs would be returned.”

The OP hacker address 0x60B28637879B5a09D21B68040020FFbf7dbA5107 sent another transaction to the Vitalik wallet, and left a message saying that 18 million OPs would be returned.https://t.co/CQItHdL1qK

— Wu Blockchain (@WuBlockchain) June 10, 2022

Unclear Intention

It is not clear why the attacker has chosen to send another amount of the seized OP tokens to Buterin; however, there is a possibility that the hacker acted that way just to send a message to the Winterminute team.

Recall that the Winterminute team threatened to hunt down the attacker if the seized OP tokens are not returned, as noted in a statement, saying:

“You have one week to consider being a whitehat. In case the above doesn’t happen, we are 100% committed to returning all the funds, tracking the person(s) responsible for the exploit, fully doxxing them, and delivering them to the corresponding juridical system.”

OP Price Performance After the Hack

After the attacker took advantage of the technical glitch in Optimism protocol and seized the 20 million units of $OP, many feared that the seized tokens would be dumped in the market, thus causing its price to crash.

Based on this, many OP investors hurriedly offloaded the asset, causing its price to dip to an all-time low of $0.72.

In contrast to what many expected, the attacker decided to hold the asset class and transfer some portions to an address belonging to the Ethereum co-founder.

This singular act gave traders yet another confidence, as seen in the price of the asset. At press time, $OP is trading at $0.91 across major exchanges, up 5% in the last 24 hours.

Experts See No Future For Luna 2.0 – Is The Terra Community Totally Done?

Back in early May, the Terra ecosystem collapsed, sending UST and Luna into a downward spiral. Luna’s price fell from over $100 to below a penny. UST lost its USD peg and inflicted even more pain on its holders. Basically, UST has become worthless. Even Terra’s developer team at TFL and founder Do Kwon seem to have abandoned it.

The launching of Terra 2.0 with newly minted tokens, dubbed Luna 2.0, hasn’t seen much success either. The new coin traded at a fairly good price at the beginning, recording around $19 in price. That’s before things went south the token’s price fell continuously, all the way down to the current $2.9 (as shown on CoinMarketCap).

Terra Under Probe

The woes mounting on Luna 2.0 may be related to the baggage that came with the collapse of the original Terra Luna and UST. Do Kwon and his company are currently under investigation both in South Korea and the US.

In South Korea, the authorities are probing TFL employees for what they term the embezzlement of the BTC reserves that were meant to prop up UST and maintain the USD peg. Do Kwon and TFL are also charged with tax evasion amounting to close to $80 million. In the US, TFL and Do Kwon are under investigation in connection to UST’s status. The US SEC wants to establish whether UST was issued as illegal and unregistered security.

What Expert Says:

Bloomberg recorded four experts’ opinions and said terra 2.0 is done and has no future.

The experts have come forward to offer their opinions about the current and future prospects regarding the new coin, Luna 2.0:

The founder of Quantum Economics, Mati Greenspan, is of the opinion that Luna 2.0 was never meant to grow. It was just a way for the heavy investors affected by the UST and Luna crash to recoup a fraction of their investments. There’s no identifiable factor to push up the price of Luna 2.0.

“Luna 2 was never meant to survive, it was simply a mechanism for some who were heavily invested to recoup some of their losses at the expense of new money coming in from the hype. I don’t see any reason for the price to go up ever.” 

Another analyst working at Messari, Kunal Goel, says that Luna 2.0 will find it hard to survive since it was created during a bad market environment (the bear market). The original Luna derived its value from being linked with UST. Luna 2.0 doesn’t have that backing. Also, the legal issues currently surrounding TFL and its founder aren’t helping.

“Terra 2.0 suffers from multiple problems. It has gone live in an unfavorable macro and crypto environment. Without an algorithmic stablecoin, it has no clear point of differentiation from other smart contract platforms. Finally, the regulatory overhang is a key concern in investors’ minds.”

Riyad Carey, an analyst at Kaiko, thinks Luna 2.0 and Terra 2.0 will have a hard time penetrating a market where big players like Ethereum, Avalanche, and Solana, are already established. Also, the loss of the UST link and lack of a burning mechanism is a negative factor in Luna 2.0.

“Luna 2 will have a difficult time distinguishing itself in a crowded L1 ecosystem with large players like Avalanche and Solana and of course Ethereum. While the original Terra had a fairly robust ecosystem, much of that activity was centered around UST and aUST (UST earning yield in Anchor). Additionally, some of the price action was based around the burning of LUNA to create UST. So now Luna 2 doesn’t have this mechanism, will be facing inflation in the form of vesting/unlocks, and obviously has the baggage of being tied to the largest ever crypto collapse. So it will definitely be a tough path forward.”

According to the CEO and founder of KoinBasket, Khaleelulla Baig, TFL and Do Kwon have lost credibility in the industry and now everyone is looking to ditch Luna 2.0.

“Everyone wants to exit the new Luna as the founder Do Kwon has lost credibility among the community. Luna has no future. The founder didn’t build firewalls around the algo even when they had an opportunity to do so. That’s why they have lost credibility. Building the new Luna within the existing community will not make any sense now. Smart money will move to fundamental coins from such risky coins.”

The famous Terra community warrior, FatMan, is launching a Terra 2.0 validator to compensate UST victims and boost community governance.

After weeks of exposing TFL and Do Kwon for their mishandling of things at Terra, FatMan is now planning to start a drive to compensate victims of the apparent UST rug pull. He broke the news in a tweet and announced that he had created a brand new account for the cause.

Decided to spin up my own Terra 2 validator – I think it'll be great fun to take part in the governance process and hopefully help improve the chain. Won't bore you with the details, so I made a separate account for it. You can click here for information: https://t.co/DMqy5B8Xhg

— FatMan (@FatManTerra) June 9, 2022

The plan is to launch an independent validator on Terra 2.0. This validator will be funded by the community and be fully transparent. According to FatMan, this validator will be free from the corruption and strong-arming that happens in the Terra ecosystem.

Validator Will be A Non-Profit

The validator will be a non-profit system where all the profits derived and a 10% commission will be used to compensate victims of the UST collapse.

Fattman said: “10% commission and all profits will be going to UST victims & litigation – it’s a non-profit validator.” 

A randomizer will be used to select a beneficiary every month or every week. At the time of this writing, FatMan has announced on the new account, dubbed UST Zone, that the validator has already received 20k LUNA as funding. A minimum of 100k LUNA for the validator to be activated and start operations. FatMan hopes this milestone will be reached in two weeks’ time.

Wow, 20k LUNA delegated already – thank you! At 100k we will reach the active set and will be able to vote on proposals. It's going to be a fun journey – excited to explore this with you guys.

— UST Zone (@USTZone) June 9, 2022

As a validator, FatMan will be able to vote on proposals initiated on Terra 2.0, and also be able to present his own proposals. Basically, the validator will be the voice of the Terra community behind FatMan. He went on to opine that the community will use the validator’s voting rights to stop Do Kwon from passing bad proposals.

“We can also stick it to Do Kwon in case he tries putting up another shady proposal – I will be voting Hell No With Prejudice.”

While some are skeptical of FatMan’s intentions, most of the community seems to support his new ambition. According to him, he has been receiving various suggestions on how to restore sanity and compensation on Terra. He has chosen this path as opposed to receiving money directly to compensate UST victims.

FatMan outlined his manifesto for the new validator.

“UST Zone is a Terra 2 validator focused on fair, thoughtful governance and UST restitution. We are going to make Terra 2 more equitable, decentralized, and successful. Here’s a bit more about our ethos.”

UST Zone is a Terra 2 validator focused on fair, thoughtful governance and UST restitution. We are going to make Terra 2 more equitable, decentralized, and successful. Here's a bit more about our ethos. (1/5)

— UST Zone (@USTZone) June 9, 2022

FatMan To Support LUNC Burn

Asked whether he was supporting the recent proposal to burn LUNC, FatMan said he would vote YES on the proposal. For one, the Terra community initially demanded a Luna burning mechanism, but that was ignored and replaced with the launch of Terra 2.0 by Do Kwon and TFL.

“No, won’t be burning LUNC. I will vote Yes on the LUNC burn proposal though.”

No, won't be burning LUNC. I will vote Yes on the LUNC burn proposal though.

— FatMan (@FatManTerra) June 9, 2022

Evidence derived from blockchain addresses reveals that Kwon and TFL dumped tokens before Terra collapsed.

New evidence discovered by FatMan and shared in a tweet reveals that Terra and its founder, Do Kwon, knew what would happen to Luna and UST before things went south for the two tokens.

What baffles the community is that Kwon and his company knew Luna and UST were going to implode but kept it secret and didn’t do anything to stop the implosion.

Here's some more blockchain evidence backing up what the SEC told us (the whole time, they were just dumping on you). Let's take this auxiliary TFL address: https://t.co/1MYEIp5otH, funding transaction from TFL wallet ($240m at the time) here: https://t.co/vS6B1UtOK1 (1/2)

— FatMan (@FatManTerra) June 9, 2022

A recent report had already revealed that TFL employees confirmed to the US SEC that Do Kwon was warned of the impending doom months before it happened, but he chose to ignore it while siphoning company funds.

TFL Dumped Tokens Worth $240 Million

Apparently, TFL and Do Kwon had other plans for Terra. They went on a dumping rampage that saw TFL dump Luna tokens worth $240 million. Interestingly, that’s just one wallet that has been discovered. There’s a possibility that there are others that held vast amounts of company funds in terms of tokens.

In the case of the $240 million worth of tokens dumped by FTL, this auxiliary wallet was used to initiate a funding transaction to this other wallet. From there, multiple transactions were initiated, and tokens were sent to the KuCoin crypto exchange, where they were to be liquidated.

The multiple transactions were meant to curtail the dumping operation and make it look like the actions of many smallholders.

However, some people have dedicated their time to find out the truth. One follower gave a tip on finding the wallets that have been dumping tokens. It’s simple: Follow the money.

Is Kwon Headed Behind Bars?

Do Kwon and his company are already under investigation in South Korea due to tax evasion and the collapse of Terra. Following an ignored subpoena by the US SEC and interviews given by Terra employees, evidence is piling up about Kwon’s involvement in a money-laundering scheme. In convicted, Kwon could face either heavy fines or prison time.