Riding The Wave News Summary #60
How Ethereum Stakers on Lido Finance Are Trading the Merge 'Gensler has to act soon': Congress, Wall Street await more SEC action amid crypto meltdown, & more
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Table of Contents
Tweets
'Gensler has to act soon': Congress, Wall Street await more SEC action amid crypto meltdown
A DAO for Diseases: How Vibe Bio Plans to Retool Biotech Funding
Tweets
How Ethereum Stakers on Lido Finance Are Trading the Merge
These days, another potentially lucrative arbitrage exists. Right now, the value of Lido Staked Ethereum (stETH), a token that previously traded 1:1 to the price of Ethereum, has lost its peg to ETH.
At the time of writing, stETH is worth $1,037, and ETH is $1,081, a 4.7% discount on stETH. This discount has been known for some time, so why haven’t any of the Hayes’ and Bankman-Fried’s of crypto already scooped up this neat little trade?
From Lido: “While Lido allows you to transfer, trade, and use your ‘staked ETH’ before the launch of phase 1.5, you can redeem staked ETH for ETH only after transfers are enabled on Ethereum 2.0. ‘staked ETH’ are minted on a 1:1 basis for every ETH staked via Lido and burned once ‘staked ETH’ are redeemed for ETH.”
It may sound easy, like capturing the Kimchi Premium back in the early days, but it takes a lot of nerve.
When making such a bet you're assuming: 1) the highly anticipated Ethereum upgrade will indeed happen, 2) Lido will still be around at that time, and 3) the price of ETH won’t have plummeted by the time of The Merge, eating up any potential arbitrage profits.
Today, Ethereum is still at four figures. Tomorrow, it could be down to three.
I do think that for someone, this could be an opportunity, but I dont think many people will jump in unless it dropped significantly more. Most of the other scenarios listed in the article allowed for short fund lock-up time and quick profits immediately leading to a much different situation versus this case where funds are locked in for a long time.
'Gensler has to act soon': Congress, Wall Street await more SEC action amid crypto meltdown
With crypto platforms going bankrupt and investors unable to withdraw funds from some crypto outfits, Senator Elizabeth Warren (D-MA) is calling on the Securities & Exchange Commission (SEC) to act.
“Congress needs to act, but the SEC has a responsibility to use its authorities to put guardrails in place and crack down on crypto actors that break the rules,” Senator Warren told Yahoo Finance.
“I’ve been ringing the alarm bell on crypto and the need for stronger rules to protect consumers and financial stability,” Warren added. “Too many crypto firms have been able to scam customers and leave ordinary investors holding the bag while insiders make off with their money.”
It’s not just members of Congress — analysts are also baffled as to why SEC Chairman Gary Gensler has not been more aggressive.
“Gensler has to act soon,” says Cowen analyst Jaret Seiburg. “Otherwise, we expect progressives and conservatives will blame him for why average investors have lost money in crypto.”
Customers of at least two crypto lenders — Celsius Network and Canada’s Voyager — have lost money and access to their accounts after both firms failed following the plunge in crypto markets.
Voyager filed for bankruptcy earlier this month after crypto hedge fund Three Arrows Capital was unable to pay back a loan to the crypto lender. Late last week, Celsius filed for bankruptcy protection as well.
Todd Phillips, director for financial regulation and corporate governance at the Center for American Progress, points to the agency’s efforts to bring dozens of enforcement actions while beefing up its personnel to protect investors in crypto markets. Last fall, the agency added 20 people to its now 50-person crypto unit.
“The SEC has been using resources very effectively,” says Phillips. “Under Chair Gensler they’re doing about as much as they can. The SEC only has so many resources and enforcement attorneys so they can only do so much.”
Various proposals have been put forth by members of both the House and the Senate, including a sprawling proposal this spring from Senators Cynthia Lummis (R, WY) and Kirstin Gillibrand (D, NY). But that legislation will likely have to be broken up into pieces to pass, and crypto-related regulation isn’t expected this year given more pressing legislative items.
“Congress is not ready to act on crypto legislation," Seiburg says. "Absent a crisis, it is hard to see Congress passing a crypto regulation bill until spring 2024. And it is likely to take more time rather than less.”
The more I see about the government and regulation the happier I get, although it’s going to be a slow and likely painful process. Crypto is, in many ways, much more complicated and foreign when compared to the real world than the internet, and the internet still doesn’t have clear regulations.
A DAO for Diseases: How Vibe Bio Plans to Retool Biotech Funding
The past two years have seen a series of fascinating and strange experiments with a (maybe) innovative organizational structure: decentralized autonomous organizations, or DAOs. A new startup thinks the structure is perfect for tackling one of the thorniest problems in biotech: funding research into rare diseases.
DAOs were conceived as early as 2015 as largely automated entities executing business logic on the blockchain – hence the “autonomous” tag. That sci-fi goal is still in the future, but in the meantime DAOs have instead become a much more human-centered collaborative structure, leveraging the speed and access of cryptocurrency networks to both gather and deploy capital from large, scattered groups of people. Often, those are for altruistic or social purposes, including projects for Ukraine relief and the notorious ConstitutionDAO, respectively.
One biosciences veteran says DAOs are the perfect structure for addressing the skewed incentives around rare diseases.
“A biotech or pharma company has a wealth of technology that can be applied to any number of diseases,” says Alok Tayi, founder and head of a new DAO-inspired biotech initiative, Vibe Bio. “But [big pharma companies] focus on the largest diseases they can pursue with that technology. An organization has to focus on the top one or two to maximize [investor returns].”
For now, the starting point is patient advocacy groups, which already work to create visibility for rare diseases.
“[Groups] come to Vibe as part of our community,” said Tayi, “with proposals to fund a potential treatment. Then the scientific side of the community can then review those proposals for things like safety and regulatory protocols. Based on that review, those scientists can rank the proposals for funding.”
“Once the community has authorized capital for a particular proposal, we set up a C-corp that pursues [that project],” Tayi said. “That C-corp is jointly owned by the DAO and the [patient] advocacy organization. We believe the advocacy group to be a secret sauce. We want to give them unprecedented control over the development of a candidate medicine.”
Movements in the space like this always excite me because they allow groups that were previously disserviced by traditional finance or other large organizations to band together. I would also be excited to see groups like this form around seeking cures instead of just treatments, as many pharmacy groups will aim for what allows more profit which is often just a temporary solution.
How blockchain technology is used to save the environment
How does blockchain factor into preserving reefs and saving the ocean?
Future Thinkers has outlined several major solutions for how blockchain can help protect the environment.
1. Supply chains
Blockchain technology is being used to improve fish traceability to help stop illegal and unsustainable fishing practices. Fishcoin is a blockchain-based seafood traceability project that “incentivizes supply chain stakeholders to share data from the point of harvest to the point of consumption” to help create a more open, transparent, accountable seafood industry.
2. Recycling | 3. Environmental treaties
4. Energy
Since the start of the Industrial Revolution, the ocean has seen a 30% increase in its acidity thanks to the absorption of carbon dioxide. Captura seeks to use solar-powered, floating plants to extract CO2 from the ocean, while Toucan Protocol is building the infrastructure for a carbon market to finance world-class climate solutions in an effort to accelerate the transition to net-zero carbon in accordance with the Paris Agreement.
5. Nonprofits
OceanDrop is a charitable nonfungible token project from the Open Earth Foundation, a nonprofit organization dedicated to developing open-source technology for climate action. The proceeds of the NFT sales, which are pegged to carbon offsets, support a pilot project aimed at expanding the protected marine areas of Cocos Island and Costa Rica.
6. Carbon tax | 7. Changing incentives
also we dont really have a crypto energy problem, more of an in general energy generation program. electricity is electricyt, cart before horse
Projects similar to the above are great, but at the end of the day, I feel there is a mindset problem for society around energy where we view different things as good or bad uses of energy where in reality, what matters is how the energy is generated. A great example is that while electric cars are great if the energy they use is generated using a non-renewable source we arent really solving the problem.
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