Nvidia is depressed

Good morning! Welcome to The Daily Moon. Do you remember the stablecoin project Beanstalk? To refresh your memory, it had suffered an attack causing a loss of a staggering $77 million. It’s back and the company announced its return with an event called Replant. The company claims it is stronger than before. But the jury is still out on how stable algo-backed stablecoins really are.

The markets saw red with Bitcoin falling below $24,000 and Ethereum managing to stay just above $1,700 levels. Nasdaq was down slightly in early trade. Back home, Indian markets were closed.

What broke Ripple?

Ripple’s token XRP was once supposed to challenge Ethereum. Now, it languishes unable to be rescued. What happened to XRP? Depends on who you speak to. Some believe the US regulator ruined it. Others say SEC was the straw that broke the camel’s back.

Where it starts

Ripple, once known as Opencoin, set up a token XRP as a bridge to enable payments between currencies. Let’s say you wanted to send cash to your friend in the US. You could, in theory, use XRP to transfer the cash. Now, can’t you do this with Bitcoin? Sure you can, but XRP advertised itself as cheaper and faster. Obviously, people loved that and it took off. All cool?

Now it gets messy

But it gets murky when the conversation comes to how these tokens were distributed. When it started, there were about 100 billion XRP tokens released to the world. About 20 billion were with the founders. Ripple’s CEO owned a significant portion of XRP tokens. But in 2017, Ripple placed ~55 million tokens in escrow. It was estimated that about 25% of the total supply was owned by people with restrictions on them. This left 21% open to trade in the secondary market, shrinking the pool of available tokens and hence raising the price.

It get messier

Ripple claimed that its tokens were popular in the APAC market. And that was why the value of the token had increased. But the total number of XRP’s transactions does not seem to have increased and there is a mismatch between trading volume and market cap. Ripple has recently helped banks build blockchain technology but they choose not to use XRP either.

Nvidia at a crossroads

Nvidia has been suffering. Its stock price has been trending lower after it revealed that it is likely to miss revenue projections. But why is this once favourite pandemic stock getting the thumbs down? Let’s break it down.

The surge

Nvidia went through three phases since the pandemic locked us indoors. The PC phase, the gaming phase and the mining phase. When people were forced to stay indoors, there was a surge in demand for high-end computers. As people spent more time at home, they realised they had spare hours on their hands. (Not us, some people). And they decided, hey why not play games. And then started a rush to buy games, and chips that supported these games. The third phase was mining. We’ve spoken about Nvidia and its tryst with mining. Do check it out, it’s a great read.

Now what?

People are back in offices, supply chain issues, inflation and the Russia-Ukraine war has put the brakes on mining and gaming.

Triple Halving ETH

The Merge, long awaited by the crypto community, is going to transition Ethereum from a proof-of-work to a proof-of-stake system. And it is going to be more than just being on an energy efficient blockchain. When the Merge happens, the entire Ethereum chain will also undergo a phenomenon called “triple halvening”.

Why you should care

Theoretically, the value of your ETH is likely to go up. A triple halvening will essentially do three things:

1. New ether coins will be issued at a slower rate (4.3% to 0.4%).

2. Some existing ether will be taken out of circulation by burning.

3. Some staked ETH will be unavailable for withdrawal.

So everyone’s getting rich?

Like we said, in theory, maybe yes. But in the practical world, it helps to be…well, practical. After a successful test run of the Merge in June, ETH prices didn’t quite soar. With a Q3/Q4 2022 date, investors are wary of whether it will actually go through. There is also the question of how the burning will impact existing projects.

Unmixing Tornado Cash

It is called Ethereum’s best known privacy tool. And like everything else that’s privacy centred, Tornado Cash is also equally prone to misuse. And it has found itself on the list of sanctioned internet services.

What is it?

Tornado Cash is a crypto mixer tool that essentially allows a crypto address to receive funds without knowing the sender’s identity.

Why the sanctions?

Tornado Cash has been allegedly involved in money laundering. A US government body estimates this to be worth $7 billion, including the infamous North-Korea based Lazarus Group’s $625 million Axie Infinity heist.

What’s the catch?

Sanctions work differently in the real world and for things like IP addresses. The current situation makes people in the US responsible for ensuring they conduct no transaction with Tornado Cash. This won’t be easy.

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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.