Entering the business day in Asia, it appears that major cryptocurrencies like Bitcoin and Ether have found stability, despite a sea of red across the rest of the market. Bitcoin is slipping marginally at $29,236, down 0.16%, whilst Ether is also down 0.27% to $1,857. The summer season is thought to be the pacifying factor for these crypto giants, with many traders hitting the beaches instead of their portfolios.
In contrast, an upheaval threatens a selected portion of the market: lending protocols. At the center of this turmoil is a token known as CRV, linked to Curve Finance’s DAO. Following a recent exploit caused by a programming bug, CRV valuations have fallen 10.3% to 56 cents. This price drop raises concerns about the fate of the $168-million lending position held by Curve Finance’s founder, Michael Egorov, on Aave – a lending protocol. As the CRV, securing his position, drifts closer to liquidation, the impending cascade of liquidations could lead to a surge of assets flooding the market. This anticipation has exacerbated the decline in lending protocol tokens such as Aave’s AAVE, down 8%, Compound’s COMP, declining by 8.8%, Maple Finance’s MPL, down 3.2%, and Maker’s MKR declining by 2%.
Meanwhile, in a move perhaps intended to distance themselves from the market chaos, digital silver (Litecoin) creators Charlie Lee and Bobby Lee are teasing a collectible card sale, which intends to capitalize on heightened interest due to a key event in the Litecoin’s blockchain cycle, known as “halving”. The promotion includes 500 cards made of 99.9% pure silver, each loaded with 6.25 Litecoin ($581). Expected to retail at around $1,000, the marked premium holds a certain intangible value to buyers. Proceeds from the sales will be donated to the Litecoin Foundation, as stated by Charlie Lee, to support continued blockchain adoption and development.
Finally, the market intends to learn and develop following the exploit on Curve. An estimated $100 million of crypto risk hangs over stablecoin exchange Curve. Ava Labs and DappRadar, key players in the Ethereum’s DeFi ecosystem, are debating the future of decentralized social dapps, and changes to the predominant AMM liquidity model. The industry also keeps a close eye on the latest tax guidance from the IRS indicating that crypto staking rewards become taxable upon receipt.
In conclusion, it’s indeed a mixed bag for the crypto market showing stability, potential downside risk due to lending protocol instability, and innovative initiatives to drive interest and funding for future development.
Source: Coindesk
