LUNA's survival plan explained
GM, we take the latest Web3 news and translate it into plain old English - so you can stay up to date, without your eyes glazing over.
In today’s edition:
LUNA's survival plan explained
The Chainsmokers are about to gift their most loyal fans with album royalties
RESOURCE: What is a Bitcoin Faucet? (learn in under 7 mins)
This company wants to be the 'Google Search' of the metaverse
Terms used (click for translation):
Stablecoins, NFTs, Web3, Metaverse.
LUNA's survival plan explained
Imagine buying a house for $1 million dollars in April, then selling it for $5,000- in May.
That's a loss of ~99.5%.
LUNA (UST's sister token) has seen the same percentage decrease over a similar time frame.
Ok, ok, let's pump the breaks - LUNA and the UST stablecoin are blood relatives?
Weird way to put it, but sure - why not. Here's how it works:
UST is a stablecoin that is designed to stay at exactly $1 USD in value.
An investor can always exchange one UST for for a dollar's worth of LUNA (whose price isn't fixed).
If UST drops below $1 (let's say .90c, for example), traders swoop in to buy UST on the cheap and exchange it for $1 worth of Luna (making a .10c profit)
A $1M dollar investment in this case would return $100K in profit (not bad for a single days work).
The idea here is that, if UST drops below $1, traders are incentivized to buy up UST and push it's price back up.
Works great on paper, though as we've seen over the past week - not so much in practice.
UST shattered its $1 USD peg and is currently sitting at .30c, whereas LUNA has dropped from its April high of $116 to .005c.
Yikes.
So is there anyway of saving it? If we shook a Magic 8 Ball, the response would probably say:
'Outlook not so good (not financial advice)'.
Here's the plan from Terraform Labs (creators of LUNA) to save their coins:
Burn all UST in the community pool and any that still exists on the Ethereum Network.
Translation: destroy a bunch of UST to make it more scarce and (hopefully) push the price up.
Stake $240 million worth of LUNA to protect the project from a governance attack.
Translation: lock up a bunch of LUNA, so bad actors can't buy up the majority share of LUNA and use their voting power to do something dodgy.
To put that into a non-crypto context, if Apple stock crashed from its current $142 per share, to say $1 per share - someone could buy a controlling stake in the company and push through a vote to start selling everyones data (very dodgy).
So will it work?
Well, as our high school guidance counselor said to our parents, after we told him our business idea for "a toaster that yells 'wooooh, let's goooo' when it pops":
"It probably won't be successful, but it's good to see them applying themselves".
The Chainsmokers are about to gift their most loyal fans with album royalties
When we first skimmed this article, we thought:
'Oh yeah, we wrote about Diplo doing the same thing a month or so ago. Eh, pass.'
We were wrong.
This is different and BIGGER:
Instead of selling royalty shares in a single (like Diplo), The Chainsmokers are giving away 1% of royalty shares across their entire album, to their most loyal fans - via NFTs.
Fans were picked after data was analyzed from ticket sales, music streams and Discord activity.
This takes Web3 community rewards to a whole new level, so if anyone is building a 'how to create and reward super fans, using Web3 technology' handbook - add this strategy to it.
...and just a heads up:
If Shania Twain ever does the same for the top streamers of her 1997 smash hit / gospel 'That Don't Impress Me Much', we'll be retiring early.
Resource of the day
What is a Bitcoin Faucet? (learn in under 7 mins)
This company wants to be the 'Google Search' of the metaverse
This is an interesting one.
And it's making us have some very strong 'shower thoughts'.
Which feels weird seeings as we're fully clothed and in public.
This whole thought spiral was spurred from Lighthouse's mission to become the 'search engine of the metaverse'...
And went a little something like this:
There's a lot of chatter within the Web3 space about which platform will 'win' the metaverse race.
(We talk about it all the time).
But we might be looking at it the wrong way...
If the metaverse is a ‘3D version of the Internet’, where 3D virtual spaces take the place of websites...
Then what if these platforms aren't competing to build the metaverse, but instead competing to create the popular '3D virtual websites' that make up the metaverse?
...it might mean that the metaverse doesn't have to be fully interoperable in the beginning.
(An example of interoperability being: items collected in one metaverse game will transfer to another).
Instead, what if users start using Lighthouse's search functionality to explore these different '3D virtual websites', with the most popular sites informing how new developers build their products in the long term?
Similar to Apple's iOS and Google's Android operating systems:
They're the most widely used, so developers create apps that are interoperable within each operating system.
Eg: A fitness app will be designed to pull health data from your Apple Health app.
Ok, that's it. That's all we've got.
...why do we feel drunk writing this?
Your Daily Dose of Web3
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Madonna defends nude NFT: 'I'm giving birth to art and creativity and we would be lost without both'
Alright, that’s it for the week!
Love to the family,