El Salvador calls upon a familiar face for some advice, excitement around Ethereum gathers momentum, and check out the front page of the fourth largest bank in the US, Goldman Sachs!
All that and much more!
- Volcano bonds: basic overview.
- Market update.
- Binance collaboration with El Salvador?
Volcano bonds 101
There has been a lot of talk about El Salvador’s upcoming volcano bond, but let’s be honest: very few people actually understand how it’ll work.
So, here’s a quick overview.
The Bond:
- El Salvador will issue US$1 billion worth of a tokenized bond.
- Tokens will have a 6.5% average percentage yield (APY) over ten years, plus dividends (this is much less than sovereign international monetary fund bond yield).
- After ten years (maturation), the bond will pay out the original investment.
- If BTC reaches US$1 million in value in the ten years, Blockworks estimates that the dividend will equate to +140% APY for token holders.
Funds will go towards:
- US$500m towards the initial construction of “Bitcoin City” and the infrastructure of the bitcoin geothermal mining facility at Conchagua Volcano.
- Once upgraded, the mining facility will begin mining additional bitcoin.
- US$500m towards purchasing bitcoin with a five-year lock-up period.
- After five years, the purchased bitcoins will pay bond dividends to token holders, and the rest will go towards additional government endeavors.
To the dismay of the international monetary fund (IMF), El Salvador looks to go through with the bold project which, if successful, could hold significant implications for the IMF and the current system of initiating sovereign bonds.
So, who’s ready to buy a bond?
Market update
Bitcoin (BTC) climbed 1.22% to end the US trading session at US$42,800 as it battles the tug of a US$41,000 Max Pain on Friday’s end of quarter derivatives expiration. BTC continues to inch towards a critical US$45,000 resistance.
BTC
Source: Trading View
Stablecoin dominance, represented by the ticker USDT.D, broke a 130-day uptrend this week and continues to slide downwards, suggesting that traders are net-net entering positions in bitcoin or altcoins.
USDT.D
Source: Trading View
| US markets close | |
| S&P 500 | -1.22% |
| Nasdaq | -1.29% |
| Dow | -1.29% |
| VIX | +2.66% |
| Crude (BRENT) 199.51 | +5.77% |
| Protocol (Coin) | Price ($) | Gain (%) |
| Xido Finance (XIDO) | 34.16 | +41 |
| Loopring (LRC) | 1.14 | +37 |
| Humans.ai (HEART) | 0.053 | +26 |
| Mina Protocol (MINA) | 2.66 | +20 |
| Axie Infinity (AXIE) | 61.55 | +18 |
| Enjin Coin (ENJ) | 1.66 | +14 |
| Cardano (ADA) | 1.11 | +14 |
| ApeCoin (APE) | 13.47 | +13% |
| The Sandbox (SAND) | 3.44 | +10 |
| Near (NEAR) | 12.11 | +10 |
| Defi Kingdom (JEWEL) | 6.03 | +22% |
| Ergo (ERG) | 4.24 | +17% |
| Tomb Shares (TSHARE) | 3,977.00 | +8% |
| Bitcoin Fear and Greed Index | 40 Fear (+9) |
| “Crypto” Google Trends | 31 |
| “Bitcoin” Google Trends | 34 (+5) |
Newswatch
- Binance founder Changpeng Zhao is visiting El Salvador to meet with Nayib Bukele today. It had been believed that Zhao would advise El Salvador on the volcanic bitcoin bonds (initially scheduled for release yesterday), but in a statement yesterday, Bukele confirmed that the bonds were not on the agenda for their meeting.
- Do Kwon’s BTC buying spree for the Terra’s Bitcoin Reserve continues in $125 million increments, and is set to continue in the weeks/months ahead.
- In a surprising turn of events, Honduras decided to forego bitcoin adoption reported a few days ago, and instead will pursue a Central Bank Digital Asset CBDC. Report by Central Bank of Honduras. The country has decided to go the route of monetary control.
- A Bored Ape Yacht Club (BAYC) NFT holder lost 3 of their Bored Apes after visiting a phishing site that proceeded to sell the non-fungible tokens (NFT) for an estimated US$900k.The scammers then utilized Tornado Cash to “wash” the ether. The story serves as a reminder to verify the authenticity of apps before connecting a wallet.
- DeFi-based Polkadot parachain Acala (ACA) launched an “aUSD Ecosystem Fund” to grow the use case of the stablecoin. Arrington Capital, Pantera Capital, and Alameda Research are some of the fund’s early investors.
- Social media giant Meta filed eight trademark applications for crypto services and the metaverse.
Notable updates
- Coinbase adds support for Mina (MINA).
- Cardano (ADA) staking now available on Coinbase.
- Fei Protocol introduces xTribe for DAO voting, governance, and rewards.
- A proposal to onboard bATOM has been submitted on Anchor (ANC). The bAtom token would allow ATOM to bond into Anchor Protocol (ANC).
- Mystery Labs, headed by former Facebook employees, announce the release of permissionless Layer-1 blockchain Sui.
- Bitcoin.com announces the issuance of the token, VERSE, for utility and rewards on the bitcoin.com ecosystem. Bitcoin.com is headed by controversial figure Roger Ver.
NFT and metaverse update
- South Korean publisher of PlayerUnknown’s Battlegrounds (PUBG), Kraften, partners with Solana Labs to support “the design and marketing of blockchain/NFT-based games.”
- GameStop, in collaboration with Immutable X (IMX) and Loopring (LRC), launch GameStop’s beta NFT marketplace. Loopring (LRC) surged almost 50% yesterday.
Banter’s take
El Salvador is taking a bold step (and risk) by selling bitcoin bonds. Nayib Bukele is taking a huge personal and political gamble which, if it pays off, will have vast implications for global finance and international politics.
To end with a quote, “Paradise” author Judith McNaught wrote: “You can’t outwit fate by standing on the sidelines placing little sidebets about the outcome of life. Either you wade in and risk everything you have to play the game, or you don’t play at all. and if you don’t play, you can’t win.”
Degen responsibly, my friends!
Gabri
