The Prometheum WTF

Plus a rate pause from Powell

Author

Nathaniel Whittemore
June 15, 2023

The Breakdown First Five - Thursday June 15, 2023

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Don’t call it a Skip

The Federal Reserve held rates steady at yesterday’s FOMC meeting, but don’t call it a skip or a pause. Instead July is a “live meeting” that hasn’t been decided yet. With inflation on one side and banking failures on the other, the Fed is threading the needle. Forecasts were updated to show two additional hikes by the end of the year to maintain hawkish options. US Equities dropped then recovered. Bitcoin dumped. Is that it for the 2022-23 hiking cycle?

4. Stake within a Stake

Restaking protocol Eigenlayer has launched on Ethereum mainnet, allowing proof-of-stakers to gain extra yield by looping their staked ETH to secure other networks. Eigenlayer’s founder says the system is a safe way to share security, while Vitalik warned that the plan could overload Ethereum’s social consensus. The conservative $17M staking limit was hit within 2 hours.

3. 3AC Contempt

Disgraced 3AC founder Kyle Davis is facing contempt of court for failing to respond to a subpoena. The bankrupt estate urged a New York court to impose a $10,000 per day penalty on Davies. The filing noted recent New York Times reporting that Davies had invested in a super yacht, was considering buying a private island and is busy taking mushrooms in Bali as evidence he was willfully ignoring the subpoena.

2. Off the Curve

Stablecoin interchange protocol Curve has become wildly lopsided as DeFi traders dump Tether. Overnight, USDT bulged to over 70% of the 3-pool, coming off its peg a little as traders cash out for USDC and DAI. The move happened quickly, the pool was equally weighted just 2 days ago. Large imbalances are rare, occurring during extreme risk-off scenarios. This is the largest imbalance since November 2022. Tether says they stand ready to redeem any amount.

1. The Prometheum WTF

Hands down the strangest story of the year is Prometheum. The firm started off as the “come in and register” darlings for obtaining FINRA authorization for their exchange. Questions at Wednesday's congressional hearing suggested there is no market for their product. Then CT began digging up a bizarre backstory ranging from ICO scams to CCP ties. There’s even a link to the Long Island Iced Tea/Blockchain drama. Are Dems getting in bed with a huckster to justify their Crypto policy stance?

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Thanks for reading -NLW