Lyft takes a hit

Good morning! Welcome to The Daily Moon. Terra 2.0 is finally coming. Do Kwon got a go-ahead from investors to rescue, ahem, stablecoin LUNA. TerraUSD will be cast aside and LUNA will get a new block home. A new Terra ecosystem will be born on Friday.

Crypto Funds Get Creative

The crypto market is on a rollercoaster ride. Bitcoin is teasing the $30,000 levels repeatedly. But crypto asset managers don’t want investors to lose patience. Innovative funds promising 4-8% yields are now out in the market. Just for reference, the Terra crash caused a drop in TerraUSD yield from 20% to 4%. This makes 4-8% sound like an attractive deal.

How does this work?Fund managers collect funds from crypto investors and invest them elsewhere. The result is better returns. Here’s how it works:

1. Investors put dollars to buy crypto assets.

2. These dollar funds are lent to companies such as Coinbase and Gemini.

3. The fund is then loaned out to stablecoins that need dollar backing.

4. Coinbase and Gemini pay a fee to access these funds.

5. This fee is given back to customers as returns.

Crypto volatility and high inflation are proving to be a golden opportunity for crypto companies. Savings account interest rates in the US are below 1% and the stock market selloff continues. That’s where crypto gets in.

And the risks?Terra didn’t have actual dollar reserves to back its algorithm. But crypto firms such as Bitwise and 21Shares claim that they will have Bitcoins and Ethereum as collateral. This means that even if the deal goes bust, the money can be recovered.

21Shares is planning to lend investor assets to the crypto platform BlockFi. But remember that the US SEC has barred BlockFi from offering high-interest accounts to individual customers.

Game of Whales

Uniswap broke the $1 trillion barrier. Before you get too excited, it’s just 3.9 million addresses that used it. In short, the whales are playing their game.

Big Leap Launched in 2018, Uniswap’s trading volume skyrocketed to $100 billion in February 2021. It touched an all-time high daily volume of $8.8 billion on November 10, 2021.

After DeFi captured the crypto scene, Uniswap gained too. Now its daily volume of $1.4 billion is:

• Three times of PancakeSwap, which is at $500 million.

• 19 times more than SushiSwap, which is at $71 million.

More $$$And while we’re talking about billions:

• FTX founder and billionaire Sam Bankman-Fried is willing to pump ~$1 billion to stop Donald Trump’s 2024 comeback as US President.

• Andreessen Horowitz is launching a $4.5 billion fund dedicated to crypto and web3 companies.

Adam Is Back

Adam Neumann is back. And this time, it’s crypto. The flamboyant and extremely controversial former CEO of WeWork had been MIA since his very public ouster in 2019. Now he has raised $70 million for his climate tech venture, Flowcarbon.

How does it flow?Carbon credits can be complicated. Flowcarbon wants to simplify it:

1. It will issue a Goddess Nature Token for nature-based projects.

2. This token is backed by certified carbon credits.

3. These credits trade on the voluntary carbon market.

4. The token can then be bought or redeemed.

5. A marketplace will be created on the Celo blockchain.

Who are the backers?The investor in everything crypto, a16z, has dropped $32 million as primary capital. Another $38 million was raised by a private sale of the Goddess Nature Token (GNT). General Catalyst and Samsung Next invested too.

BTWGeneral Catalyst has also made its web3 entry in India with a $2.5 million investment in Stan.

#ICYMI Neumann is an interesting character. His co-working startup WeWork was once an investor favourite. But things went downhill pretty quickly. In 2019, WeWork crashed and he quit. We recommend you put ‘WeCrashed’ on your weekend watch list.

Lyft Needs A Ride

Lyft is riding a bad wave. The ride-sharing giant plans to cut spending and hit a pause on hiring. It blamed slow recovery for its decisions. Weak projections and driver shortages have already caused the stock to fall ~61% since the beginning of the year.

Hitting roadblocks The company’s first-quarter earnings weren’t too bad. Revenue grew by 44% and losses narrowed. But here’s what hurt investors:

• The lower-than-expected revenue estimates for the current quarter.

• Continuing incentives to retain drivers which will eat up cash flows.

• Net loss of $196.9 million, which will widen if expenses rise.

The technology stock selloff which began in January hasn’t spared Lyft. Its stock price saw a 30% wipeout between January and May. Following the results on May 4, it fell 30% on a single day.

Tuesday night (IST) was also a bad day for US stocks after Snap fell 43%. Social media stocks such as Meta Platforms, Alphabet, Twitter, and Pinterest tumbled soon after wiping off $135 billion in value.

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Who are we? There is a lot happening in our world. Everything has layers, and each layer has to be carefully peeled so you, the reader, know how the world of money is changing every day. That’s our promise. Help you unpeel the onions, which are the public markets in the US, India, and crypto, so that you know just a little more.