Select Stablecoin Market Caps Decline As Binance Auto-Converts To BUSD

🌅 Welcome!

A trillion-dollar financial services company is launching an Ethereum fund and a bankrupt crypto fund’s multi-million dollar NFT portfolio is repossessed by liquidators. Elsewhere, Twitter confirms a buyout by Elon Musk as DOGE pumps on the news. Just another sign of a rational, healthy, and fully functional market.

Market caps of select stablecoins are trending down, and our Media team takes a look at how regulators are responding to the censorship-resistant nature of Ethereum.

This is the Delphi Daily. Let’s dive in.

🚨 In Case You Missed It

• NFTs owned by the bankrupt crypto fund, Three Arrows Capital were transferred to a Gnosis Safe wallet as liquidators explore an eventual sale.
• Etherscan will stop supporting Ropsten and Rinkeby testnets. The Ethereum Foundation also plans to move over to Goerli and Sepolia testnets.
• Fidelity launches a new fund to invest in ETH. The fund has already raised $5m from accredited investors.
• The EU finalizes the full legal text of its landmark crypto legislation that introduces licenses for wallets and exchanges.

📊 Select Stablecoin Market Caps Fall As Binance Moves To BUSD

• Since the start of September, the market cap of USDC is down -11%, USDP is down -5%, and TUSD is down -17%. On the other hand, the market cap of BUSD is up 10% during the same period.
• This divergence in the total supply of these stablecoins can be attributed to a move announced by Binance on Sept 5th. The exchange stated that it will auto-convert any USDC, USDP, and TUSD balances held by users to BUSD.
• Additionally, the exchange announced that it will delist spot trading pairs associated with these stablecoins and stop accepting them as margin assets for futures.
• Users can still deposit or withdraw these stablecoins, but they will be converted to BUSD for use on the exchange.
• While combining different stablecoins into one enhances liquidity and capital efficiency for traders, it also helps Binance increase the usage of its native BUSD stablecoin over others.
• The market cap of USDT, a major stablecoin that was not included in the announcement, remains unaffected during this period.

📺 Ethereum: The Big Red Line

• Ethereum is currently facing its largest battle test yet. In August, the U.S. Office of Foreign Asset Control (OFAC) sanctioned Tornado Cash and arrested its creator Alexey Pertsev.
• This caused Flashbots, Ethereum’s largest block builder, and other decentralized applications (dApps) to start censoring transactions on Ethereum, a supposedly permissionless network.
• How much power do the U.S. regulators have over Ethereum? Is Ethereum and its dApps truly decentralized? And will Ethereum survive?
• Show Notes
  • 00:00:00 – Opening
  • 00:00:34 – What makes Ethereum special?
  • 00:02:36 – U.S. Regulators move against crypto.
  • 00:04:10 – Tornado Cash sanctions & Alexey Pertsev’s arrest.
  • 00:06:40 – Censorship by decentralized applications.
  • 00:07:54 – Crypto fights back.
  • 00:08:40 – Ethereum validator censorship scenarios.
  • 00:11:27 – Consequences of U.S. regulations.
  • 00:14:07 – The future of Ethereum.
• Social links:
  • Jon’s Twitter 
  • Gabriel’s Twitter
  • Tornado Cash Twitter
• Resources:
  • The Hitchhiker’s Guide to Ethereum
  • The Complete Guide to Rollups

🐣 Notable Tweets

Introducing Rovers by Mars Protocol

1/ Mars v2 introduces a radical new DeFi primitive to Cosmos: Rovers

Engineered to operate in the cosmos’ harshest environments, rovers aim to give their pilots DeFi superpowers to navigate new, uncharted worlds. Here’s how…

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— Mars Protocol (@mars_protocol) Oct 4, 2022

How Does Ribbon Earn 25%+ APY on USDC?

Seen a bit of confusion surrounding the @ribbonfinance R-Earn $USDC vault mechanics…

Can you really earn 25%+ APY on vanilla $USDC deposits w.o liq mining rewards?

How is this sustainable?

Let’s take a dive into the strategy specifics 🧵👇

— Barry Fried 🦇🔊 (@BarryFried1) Oct 4, 2022