The degens of Web3 & their latest gamble
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 bitcoin reserves = degen catnip
'Metaverse-as-a-service' will be the basis of Web3
RESOURCE: Everything you need to know to use Binance in ~10 mins
The crypto market just shot up 13% in a day! But what caused it?
Terms used (click for translation):
Degens, Web3, Metaverse.
LUNA's bitcoin reserves = degen catnip
If you've spent any amount of time on crypto Twitter, you've probably seen the term 'degen' being thrown around.
Put simply: 'degen' is a label (proudly) worn by those with an obsession for high-risk cryptocurrency trading.
If there's a 'high risk/high reward' opportunity in the Web3 space - the degens will come running.
And currently, they're flocking to LUNA.
As we covered last week, LUNA crashed from ~$118 per token to about ~$0.0002 (as of this writing).
So why would anyone want to buy in to it?
Well, before the crash, the team behind Luna bought ~$3.5B worth of Bitcoin, to be sold and used to bolster LUNA's price in case of an emergency.
When the crash happened, they tapped into that reserve...but folks tracking the spend can only account for ~$1.68B of it being used.
(Meaning there might be a cool ~$2B left to spend).
The degen theory goes a little something like this:
If the LUNA team were to sell that Bitcoin, they could use the profits to buy up 80% of the LUNA tokens that are on the market and immediately destroy, or 'burn' them.
This theoretical reduction in available LUNA tokens could push the LUNA price back up above $1 and beyond.
Sure, $1 is nothing compared to the $118 per token we saw last month...
But as of this writing, $250 USD will get you ~1 million LUNA tokens.
The chance to buy 1 million tokens at $250 and potentially sell them for $1M = degen catnip.
If you're reading this and getting all excited, remember:
These sorts of investments often go to zero and anyone currently buying into LUNA has a high chance of losing it all.
This is definitely not financial advice. Degen at own risk!
'Metaverse-as-a-service' will be the basis of Web3
Building your own 3D virtual world, within the metaverse, without any coding knowledge?
That sounds like a pipe dream...and at the moment - it is.
But for the metaverse to become a very real and widely adopted 'thing' - this problem is going to have to be solved.
Sandra Helou's vision is that 'metaverse-as-a-service' (MaaS) companies will soon supply us with the tools needed to build our own 3D virtual spaces - without a computer science degree.
If you're wondering what in the world a 'MaaS' company would do exactly - think of them as the Web3 equivalent of a Shopify-style service.
In Shopify's case, they let users build an online store without any coding knowledge.
In the metaverse, each MaaS company would focus its service on a different use case.
For example, there might be a range of competing services that let you build your own metaverse based:
Games
Concert spaces
Chat rooms
E-commerce stores
Gallery spaces
(all without coding knowledge).
This gets us all riled up, because services that are easy to use and (potentially) profitable for all parties involved, are the quickest way to spur innovation.
And MaaS technology could be just that.
Resource of the day
Everything you need to know to use Binance.
In ~10 mins
The crypto market just shot up 13% in a day! But what caused it?
Tell us if you've heard this one before:
A few years ago, Toyota announced to its registered service partners that all 2008 Corolla's had an airbag fault.
They told their service partners that it would not be covered by warranty, and that they were going to announce this publicly in a weeks time.
One particularly cunning mechanic figured this would devalue the car - and hatched a plan to profit from it.
He called three of his customers, who he knew drove the '08 Corolla in question, and told them it was time for an immediate and wide ranging service (new clutch, new timing belt - that sort of thing).
The trusting customers were told the service would take a week or so to complete.
In that time, the mechanic:
Took the three cars to a used car dealership.
Sold them all at $5K a piece ($15K total).
Waited for the bad news to come out.
Went back to the dealership.
Bought them back at a discount: $4K each ($12K total).
Pocketed the $3K difference as profit.
Returned the cars to his un-assuming customers.
If you've never heard this story, that's because we just made it up.
You've just been Miyagi'd into learning about 'short selling'...
Which is where folks borrow a cryptocurrency they think is about to go down in price and sell it immediately, then once price drops, they buy it all back, pocket the difference and return the coins to the original owner.
As the crypto market continues to trend downwards, you might also start to hear the term 'short squeeze' being thrown around.
That's where speculators borrow a coin, thinking it's going to go down, but it actually goes up and they're forced to buy it all back for more than they sold it.
This sort of forced buying pressure can make a coin's price go up even further, causing more and more short sellers to have to buy back at a loss.
This snowball effect of upwards price movement, caused by short sellers being forced to cover their losses, is known as a 'short squeeze'.
So if you've been wondering why the crypto market has all of a sudden risen 13% amidst all this fear and panic, it's most likely due to a short squeeze.
Your Daily Dose of Web3
Bored Ape NFT was 'accidentally' sold for $200 USD (instead of 200 ETH)
Riot Blockchain’s Texas expansion could use power to light 200,000 homes
Stablecoins receive Queen’s blessing as UK braces for Landmark crypto legislation
NFT launchpad to launch free training for 300 NFT creators to empower 500 businesses in Web3 by 2025
Alright, that’s it for today!
Love to the family,