A handshake agreement has kept DeFi from toppling, for now
Mika Honkasalo is a DeFi researcher and the creator of Access Protocol.
In this episode, Honkasalo provides analysis on whether or not the $BALD memecoin saga could have ties to Alameda Research, and how a handshake deal prevented a near on-chain catastrophe in the DeFi lending market.
Outline:
01:16 - $BALD debacle on Base
04:51 - $BALD deployer's ties to Alameda
08:14 - What's next for Coinbase's Base
09:16 - Crypto rugpulls
10:39 - Leetswap exploit
11:37 - Curve DeFi leverage
14:38 - Viper exploit
15:44 - OTC Curve buyers
17:37 - What's next for Curve?
19:06 - What's next for DeFi?
21:35 - Closing thoughts
Why Possible Insolvencies by Celsius and 3AC Could Spell Disaster for Crypto - Ep. 364
Mika Honkasalo, independent crypto researcher, discusses what is happening with Celsius and Three Arrows Capital, the importance of having proper risk management, and the contagion effects on the industry.
Show highlights:
why is it so significant that Celsius paused withdrawals
what is stETH and why is it important to understand the Celsius situation
how the Luna/UST debacle started a contagion effect in the crypto space
why Celsius’s investors won’t bail the company out
what will happen to Celsius’s retail customers
what Three Arrows Capital (3AC) is and whether they have a solvency problem
how 3AC was levered long and whether they had poor risk management
who will be hurt if 3AC goes under
what would be the effect of 3AC and Celsius collapsing
which types of funds that Mika will be eyeing to see if they also end up in a similar situation to 3AC and Celsius
why Mika would counsel anyone who keeps their money with centralized crypto lenders to scrutinize their practices
Thank you to our sponsors!
Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021
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EPISODE LINKS
Mika Honkasalo
Twitter: https://twitter.com/mhonkasalo
Substack: https://mhonkasalo.substack.com/
Mika’s writings on The Block: https://www.theblockcrypto.com/author/mika-honkasalo
Mika’s blog post on the stETH-ETH peg: https://mhonkasalo.substack.com/p/stetheth-peg-not-a-peg-presents-a?s=r
Celsius announcement that they would be withholding assets: https://twitter.com/CelsiusNetwork/status/1536169010877739009?s=20&t=hL-ZsBSKZOLF-whTwNmjgw
Nexo’s offer to buy Celsius assets:
https://twitter.com/Nexo/status/1536256598993211393?s=20&t=vKmJCZGNToaOqZU-TEjcDg
Celsisus’s investors unlikely to bail out company:
https://www.wsj.com/articles/celsius-networks-investors-unlikely-to-provide-more-funds-to-bail-out-crypto-lender-11655395113
Celsius hires restructuring lawyers:
https://www.wsj.com/articles/crypto-lender-celsius-hires-restructuring-lawyers-after-account-freeze-11655250575?tpl=br
Why staked ETH is part of Celsius’s and 3AC’s woes:
https://www.coindesk.com/markets/2022/06/14/staked-ether-becomes-focus-of-crypto-stress-from-celsius-to-three-arrows/
Conor Ryder on the stETH liquidity problem
https://twitter.com/ConorRyder/status/1537130483007508480?s=20&t=pZGZf17ed_DyOS18CHExmQ
The DeFi Edge on the 3AC situation: https://twitter.com/thedefiedge/status/1537465349976694786?s=20&t=Q29mo3EKSASasTenHVEm4Q
Who else has exposure to 3AC:
https://fortune.com/2022/06/16/crypto-crash-hedge-fund-three-arrows-capital-insolvency-rumors-novogratz/
3AC withholding $1M in assets from 8 Blocks Capital:
https://twitter.com/Danny8BC/status/1537224378554806272?s=20&t=Q29mo3EKSASasTenHVEm4Q
Meltem Demirors explains the problem from the balance sheet perspective:
https://twitter.com/Melt_Dem/status/1537155214897201153?s=20&t=Q29mo3EKSASasTenHVEm4Q
Adam Levitin on Celsius bankruptcy
https://twitter.com/AdamLevitin/status/1536932912674836481?s=20&t=Q29mo3EKSASasTenHVEm4Q
degentrading on Why Celsius and 3AC going under should cause you to worry
https://twitter.com/hodlKRYPTONITE/status/1536902115540742144?s=20&t=Q29mo3EKSASasTenHVEm4Q
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How Did UST Collapse? | Jordi Alexander & Mika Honkasalo
Jordi Alexander and Mika Honkasalo join Jason and Santiago on today’s episode of “Empire" to discuss the meltdown of UST, Terra's stablecoin. The match was lit Sunday with UST de-pegging from one dollar, and it's now become the single biggest wealth destruction event in crypto.
Jordi and Mika explain what led to UST's demise, how this could have been prevented, and what's in store for the future of UST and Terra. Is this the end of decentralized stablecoins? Can the market recover? Tune in to find out.
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Follow Jason: https://twitter.com/JasonYanowitz
Follow Santi: https://twitter.com/santiagoroel
Follow Jordi: https://twitter.com/gametheorizing
Subscribe To Our YouTube Channel: https://tinyurl.com/4fdhhb2j
Subscribe To Our Podcast: apple.co/3srZf7M or sptfy.com/8bQc
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(00:00) Introduction
(01:07) What Happened to UST?
(04:32) Utility vs Ponzi Mechanics
(12:13) BTC Reserve
(15:26) The Attack
(20:32) How Did Institutions Play This?
(24:31) Macro's Impact
(26:52) Future of Decentralized Stablecoins
(35:46) How Could UST Be Designed Differently?
(43:21) The Multiplier Effect
(44:44) The Soros Test
(46:57) What's Next for UST?
(56:16) The Arbitrage
(59:12) The Systemic Effects
(1:05:40) The Investment Outlook
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Disclaimer: Nothing said on Empire is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Santiago, Jason, and our guests may hold positions in the companies, funds, or projects discussed.
Crypto researcher unpacks why UST broke down and what happens next
Bitcoin traded below $30,000 on Monday, amid market uncertainty brought about by the ‘depegging' of UST—an algorithmic stablecoin whose value is supposed to remain equivalent to $1.
At publication, UST is trading at $0.92, although the ‘stablecoin’ saw lows of $0.6050 on the Binance UST/USDT trading pair.
In this breaking episode of The Scoop, host Frank Chaparro spoke with crypto researcher Mika Honkasalo, who appeared on the podcast to provide a detailed look at how the UST drama is unfolding.
As Honkasalo explained, while UST has experienced depegging before, this time around is structurally different:
“I think people at first didn't really realize that it would be a real thing, because they had seen something similar before and they didn't realize that the structure of the market had become a lot more averse to UST than it previously had. And I think what you're seeing today is sort of that just escalating or going further.”
Although the Luna Foundation Guard announced plans yesterday to support the UST peg with $1.5 billion worth of assets, whether or not UST returns to its peg will likely come down to whether the buyers or sellers win out.
As Honkasalo noted during the interview,
“Whether or not it maintains the peg today is very much a question of: if the sellers sort of run out of tokens and the buyers have more, the buyers will live to fight another day here in the mid-term.”
As for the future fate of Luna and UST, Honkasalo thinks much of its success will rest on macro forces outside of its control.
“I think that if the market turns positive, it will be much easier to keep the whole Luna ecosystem going. But if it continues to be more negative than this, the next wave of sells could be even much worse.”
Episode 41 of Season 4 of The Scoop was recorded remotely with The Block’s Frank Chaparro and Mika Honkasalo, Crypto Researcher.
Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests to podcast@theblockcrypto.com.
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A deep dive into Uniswap v3 with The Block's Mika Honkasalo
After much anticipation, Uniswap v3 — the latest upgrade to the Ethereum-based decentralized exchange — was announced Tuesday.
On this episode of The Scoop, The Block Research's Mika Honkasalo walked through the designed upgrade, explaining the significance of Uniswap's adoption of "concentrated liquidity" which aims to make trading on the platform more capital efficient.
In Honkasalo's view, this move will help with the adoption of Uniswap among traders and perhaps serve as a tailwind for the broader DeFi market.
"I think this is why Uniswap really had nowhere to go in their design except move towards this sort of active liquidity provision because that’s something that works with traditional markets,” he said, adding:
"I think what this unlocks next is the possibility to support just more volumes, especially in combination with the L2 launch, which hopefully comes very quickly after the L1 launch is to really start competing against centralized exchanges."
Uniswap v3 — set to be implemented in May — will also include Uniswap's adoption of scaling solution Optimism, which aims to reduce gas fees.
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