Alex Mashinsky, CEO of Celsius, speaks at Web Summit 2021 in Lisbon. 

Celsius Network filed for Chapter 11 bankruptcy a month after freezing customer withdrawals, joining other crypto casualties.

Celsius took the step to stabilize its business and restructure for all stakeholders. The filing was done in the Southern District of New York.

The company, which amassed more than $20 billion by offering 18% interest on cryptocurrency deposits, paused withdrawals and other functions in mid-June, citing "extreme market conditions."

As the Fed raises interest rates aggressively, it hurts risk sentiment and squeezes funding costs. Voyager Digital Ltd. filed for Chapter 11 bankruptcy this month, and Three Arrows Capital has called in liquidators.

Celsius called the pause "difficult but necessary." Without the halt, "the acceleration of withdrawals would have allowed certain customers to be paid in full while leaving others to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities," it said.

Celsius declined to comment. CEO Alex Mashinsky said the move will strengthen the company's future.

The company wants to keep operating. It's not requesting permission to allow customer withdrawals right now; Chapter 11 will handle customer claims. The filing estimates assets and liabilities between $1 billion and $10 billion.

Celsius is advised by Kirkland & Ellis, Centerview Partners, and Alvarez & Marsal.

Yield-promises

Celsius promised 18% returns on crypto loans. It lent those coins to institutional investors and participated in decentralized-finance apps.

When TerraUSD (UST) and Luna collapsed in May, Celsius pulled its funds from Terra's Anchor Protocol, which offered 20% returns on UST deposits. Recently, another large holding, staked ETH, or stETH, which is tied to Ether, became illiquid and discounted to Ether.

The lender is one of many crypto companies hurt by risky bets in the bear market. Also, Babel halted withdrawals. Voyager Digital filed for bankruptcy, and crypto hedge fund Three Arrows Capital filed for Chapter 15 bankruptcy.

According to blockchain data and tracker Zapper, Celsius repaid all of its debt in Aave, Compound, and MakerDAO last month.

Celsius charged Symbolic Capital Partners Ltd. 2,000 Ether as collateral for a cash loan on June 13. According to company filings, Symbolic was charged 2,545.25 Ether on June 11.

In July 6 filings, it said it reshuffled its board, appointing two new members and firing others.

The crypto market crashed in June 2022. Bitcoin and other cryptocurrencies hit their lowest prices in over a year, causing market panic. Some believe this crash will benefit future investors.

Before I discuss how this crash might help investors, let's examine why it happened. Inflation in the U.S. reached a 30-year high in 2022 after Russia invaded Ukraine. In response, the U.S. Federal Reserve raised interest rates by 0.5%, the most in almost 20 years. This hurts cryptocurrencies like Bitcoin. Higher interest rates make people less likely to invest in volatile assets like crypto, so many investors sold quickly.

The crypto market collapsed. Bitcoin, Ethereum, and Binance dropped 40%. Other cryptos crashed so hard they were delisted from almost every exchange. Bitcoin peaked in April 2022 at $41,000, but after the May interest rate hike, it crashed to $28,000. Bitcoin investors were worried. Even in bad times, this crash is unprecedented.

Bitcoin wasn't "doomed." Before the crash, LUNA was one of the top 5 cryptos by market cap. LUNA was trading around $80 at the start of May 2022, but after the rate hike?

Less than 1 cent. LUNA lost 99.99% of its value in days and was removed from every crypto exchange. Bitcoin's "crash" isn't as devastating when compared to LUNA.

Many people said Bitcoin is "due" for a LUNA-like crash and that the only reason it hasn't crashed is because it's bigger. Still false. If so, Bitcoin should be worth zero by now. We didn't. Instead, Bitcoin reached 28,000, then 29k, 30k, and 31k before falling to 18k. That's not the world's greatest recovery, but it shows Bitcoin's safety.

Bitcoin isn't falling constantly. It fell because of the initial shock of interest rates, but not further. Now, Bitcoin's value is more likely to rise than fall. Bitcoin's low price also attracts investors. They know what prices Bitcoin can reach with enough hype, and they want to capitalize on low prices before it's too late.

Bitcoin's crash was bad, but in a way it wasn't. To understand, consider 2021. In March 2021, Bitcoin surpassed $60k for the first time. Elon Musk's announcement in May that he would no longer support Bitcoin caused a massive crash in the crypto market. In May 2017, Bitcoin's price hit $29,000. Elon Musk's statement isn't worth more than the Fed raising rates. Many expected this big announcement to kill Bitcoin.

Not so. Bitcoin crashed from $58k to $31k in 2021. Bitcoin fell from $41k to $28k in 2022. This crash is smaller. Bitcoin's price held up despite tensions and stress, proving investors still believe in it. What happened after the initial crash in the past?

Bitcoin fell until mid-July. This is also something we’re not seeing today. After a week, Bitcoin began to improve daily. Bitcoin's price rose after mid-July. Bitcoin's price fluctuated throughout the rest of 2021, but it topped $67k in November. Despite no major changes, the peak occurred after the crash. Elon Musk seemed uninterested in crypto and wasn't likely to change his mind soon. What triggered this peak? Nothing, really. What really happened is that people got over the initial statement. They forgot.

Internet users have goldfish-like attention spans. People quickly forgot the crash's cause and were back investing in crypto months later. Despite the market's setbacks, more crypto investors emerged by the end of 2017. Who gained from these peaks? Bitcoin investors who bought low. Bitcoin not only recovered but also doubled its ROI. It was like a movie, and it shows us what to expect from Bitcoin in the coming months.

The current Bitcoin crash isn't as bad as the last one. LUNA is causing market panic. LUNA and Bitcoin are different cryptocurrencies. LUNA crashed because Terra wasn’t able to keep its peg with the USD. Bitcoin is unanchored. It's one of the most decentralized investments available. LUNA's distrust affected crypto prices, including Bitcoin, but it won't last forever.

This is why Bitcoin will likely rebound in the coming months. In 2022, people will get over the rise in interest rates and the crash of LUNA, just as they did with Elon Musk's crypto stance in 2021. When the world moves on to the next big controversy, Bitcoin's price will soar.

Bitcoin may recover for another reason. Like controversy, interest rates fluctuate. The Russian invasion caused this inflation. World markets will stabilize, prices will fall, and interest rates will drop.

Next, lower interest rates could boost Bitcoin's price. Eventually, it will happen. The U.S. economy can't sustain such high interest rates. Investors will put every last dollar into Bitcoin if interest rates fall again.

Bitcoin has proven to be a stable investment. This boosts its investment reputation. Even if Ethereum dethrones Bitcoin as crypto king one day (or any other crypto, for that matter). Bitcoin may stay on top of the crypto ladder for a while. We'll have to wait a few months to see if any of this is true.

This post is a summary. Read the full article here.

Security, privacy, and a strategy!

How to manage digital assets in worst-case scenarios is a perennial crypto concern. Since blockchain and bitcoin technology is very new, this hasn't been a major issue. Many early developers are still around, and many groups created around this technology are young and feel they have a lot of life remaining. This is why inheritance and estate planning in crypto should be handled promptly. As cryptocurrency's intrinsic worth rises, many people in the ecosystem are holding on to assets that might represent generational riches. With that much value, it's crucial to have a plan. Creating a solid plan entails several challenges.

• the initial hesitation in coming up with a plan

• The technical obstacles to ensuring the assets' security and privacy

• the passing of assets from a deceased or incompetent person

• Legal experts' lack of comprehension and/or understanding of how to handle and treat cryptocurrency.

This article highlights several challenges, a possible web3-native solution, and how to learn more.

The Challenge of Inheritance:

One of the biggest hurdles to inheritance planning is starting the conversation. As humans, we don't like to think about dying. Early adopters will experience crazy gains as cryptocurrencies become more popular. Creating a plan is crucial if you wish to pass on your riches to loved ones. Without a plan, the technical and legal issues I barely mentioned above would erode value by requiring costly legal fees and/or taxes, and you could lose everything if wallets and assets are not distributed appropriately (associated with the private keys). Raising awareness of the consequences of not having a plan should motivate people to make one.

Controlling Change:

Having an inheritance plan for your digital assets is crucial, but managing the guts and bolts poses a new set of difficulties. Privacy and security provided by maintaining your own wallet provide different issues than traditional finances and assets. Traditional finance is centralized (say a stock brokerage firm). You can assign another person to handle the transfer of your assets. In crypto, asset transfer is reimagined. One may suppose future transaction management is doable, but the user must consent, creating an impossible loop.

• I passed away and must send a transaction to the person I intended to deliver it to.

• I have to confirm or authorize the transaction, but I'm dead.

In crypto, scheduling a future transaction wouldn't function. To transfer the wallet and its contents, we'd need the private keys and/or seed phrase. Minimizing private key exposure is crucial to protecting your crypto from hackers, social engineering, and phishing. People have lost private keys after utilizing Life Hack-type tactics to secure them. People that break and hide their keys, lose them, or make them unreadable won't help with managing and/or transferring. This will require a derived solution.

Legal Challenges and Implications

Unlike routine cryptocurrency transfers and transactions, local laws may require special considerations. Even in the traditional world, estate/inheritance taxes, how assets will be split, and who executes the will must be considered. Many lawyers aren't crypto-savvy, which complicates the matter. There will be many hoops to jump through to safeguard your crypto and traditional assets and give them to loved ones.

Knowing RUFADAA/UFADAA, depending on your state, is vital for Americans. UFADAA offers executors and trustees access to online accounts (which crypto wallets would fall into). RUFADAA was changed to limit access to the executor to protect assets. RUFADAA outlines how digital assets are administered following death and incapacity in the US.

A Succession Solution

Having a will and talking about who would get what is the first step to having a solution, but using a Dad Mans Switch is a perfect tool for such unforeseen circumstances. As long as the switch's controller has control, nothing happens. Losing control of the switch initiates a state transition.

Subway or railway operations are examples. Modern control systems need the conductor to hold a switch to keep the train going. If they can't, the train stops.

Enter Sarcophagus

Sarcophagus is a decentralized dead man's switch built on Ethereum and Arweave. Sarcophagus allows actors to maintain control of their possessions even while physically unable to do so. Using a programmable dead man's switch and dual encryption, anything can be kept and passed on. This covers assets, secrets, seed phrases, and other use cases to provide authority and control back to the user and release trustworthy services from this work. Sarcophagus is built on a decentralized, transparent open source codebase. Sarcophagus is there if you're unprepared.

New standards help NFTs reach their full potential.

NFTs lack interoperability and functionality. They have great potential but are mostly speculative. To maximize NFTs, we need flexible smart contracts.

Current requirements are too restrictive.

Most NFTs are based on ERC-721, which makes exchanging them easy. CryptoKitties, a popular online game, used the 2017 standard to demonstrate NFTs' potential.

This simple standard includes a base URI and incremental IDs for tokens. Add the tokenID to the base URI to get the token's metadata.

This let creators collect NFTs. Many NFT projects store metadata on IPFS, a distributed storage network, but others use Google Drive. NFT buyers often don't realize that if the creators delete or move the files, their NFT is just a pointer.

This isn't the standard's biggest issue. There's no way to validate NFT projects.

Creators are one of the most important aspects of art, but nothing is stored on-chain.

ERC-721 contracts only have a name and symbol.

Most of the data on OpenSea's collection pages isn't from the NFT's smart contract. It was added through a platform input field, so it's in the marketplace's database. Other websites may have different NFT information.

In five years, your NFT will be just a name, symbol, and ID.

Your NFT doesn't mention its creators. Although the smart contract has a public key, it doesn't reveal who created it.

The NFT's creators and their reputation are crucial to its value. Think digital fashion and big brands working with well-known designers when more professionals use NFTs. Don't you want them in your NFT?

Would paintings be as valuable if their artists were unknown? Would you believe it's real?

Buying directly from an on-chain artist would reduce scams. Current standards don't allow this data.

Most creator profiles live on centralized marketplaces and could disappear. Current platforms have outpaced underlying standards. The industry's standards are lagging.

For NFTs to grow beyond pointers to a monkey picture file, we may need to use new Web3-based standards.

Introducing NFTs 2.0

Fabian Vogelsteller, creator of ERC-20, developed new web3 standards. He proposed LSP7 Digital Asset and LSP8 Identifiable Digital Asset, also called NFT 2.0.

NFT and token metadata inputs are extendable. Changes to on-chain metadata inputs allow NFTs to evolve. Instead of public keys, the contract can have Universal Profile addresses attached. These profiles show creators' faces and reputations. NFTs can notify asset receivers, automating smart contracts.

LSP7 and LSP8 use ERC725Y. Using a generic data key-value store gives contracts much-needed features:

• The asset can be customized and made to stand out more by allowing for unlimited data attachment.

• Recognizing changes to the metadata

• using a hash reference for metadata rather than a URL reference

This base will allow more metadata customization and upgradeability. These guidelines are:

• Genuine and Verifiable Now, the creation of an NFT by a specific Universal Profile can be confirmed by smart contracts.

• Dynamic NFTs can update Flexible & Updatable Metadata, allowing certain things to evolve over time.

• Protected metadata Now, secure metadata that is readable by smart contracts can be added indefinitely.

• Better NFTS prevent the locking of NFTs by only being sent to Universal Profiles or a smart contract that can interact with them.

Summary

NFTS standards lack standardization and powering features, limiting the industry.

ERC-721 is the most popular NFT standard, but it only represents incremental tokenIDs without metadata or asset representation. No standard sender-receiver interaction or security measures ensure safe asset transfers.

NFT 2.0 refers to the new LSP7-DigitalAsset and LSP8-IdentifiableDigitalAsset standards.

They have new standards for flexible metadata, secure transfers, asset representation, and interactive transfer.

With NFTs 2.0 and Universal Profiles, creators could build on-chain reputations.

NFTs 2.0 could bring the industry's needed innovation if it wants to move beyond trading profile pictures for speculation.

GM Friens

The space had better days. Those greenish spikes...oh wow, haven't felt that in ages. Cryptocurrencies and NFTs have lost popularity. Google agrees. Both are declining.

As seen below, crypto interest spiked in May because of the Luna fall. NFT interest is similar to early October last year.

This makes me think NFTs are mostly hype and FOMO. No art or community. I've seen enough initiatives to know that communities stick around if they're profitable. Once it starts falling, they move on to the next project. The space has no long-term investments. Flip everything.

OpenSea trading volume has stayed steady for months. May's volume is 1.8 million ETH ($3.3 billion).

Despite this, I think NFTs and crypto will stick around. In bad markets, builders gain most.

Only 4k developers are active on Ethereum blockchain. It's low. A great chance for the space enthusiasts.

An employee of OpenSea might get a 40-year prison sentence for insider trading using NFTs.

Nathaniel Chastian, an OpenSea employee, traded on insider knowledge. He'll serve 40 years for that.

Here's what happened if you're unfamiliar.

OpenSea is a secondary NFT marketplace. Their homepage featured remarkable drops. Whatever gets featured there, NFT prices will rise 5x.

Chastian was at OpenSea. He chose forthcoming NFTs for OpenSeas' webpage.

Using anonymous digital currency wallets and OpenSea accounts, he would buy NFTs before promoting them on the homepage, showcase them, and then sell them for at least 25 times the price he paid.

From June through September 2021, this happened. Later caught, fired. He's charged with wire fraud and money laundering, each carrying a 20-year maximum penalty.

Although web3 space is all about decentralization, a step like this is welcomed since it restores faith in the area. We hope to see more similar examples soon.

Here's the press release.

Understanding smart contracts

@cantino.eth has a Twitter thread on smart contracts. Must-read. Also, he appears educated about the space, so follow him.

We've all been there: You propose a suggestion to your team at a meeting, and most people appear on board, but a handful or small minority aren't. How can we achieve collective buy-in when we need to go forward but don't know how to deal with some team members' perceived intransigence?

Steps:

1. Investigate the divergent opinions: Begin by sincerely attempting to comprehend the viewpoint of your disagreeing coworkers. Maybe it makes sense to switch horses in the middle of the race. Have you completely overlooked a blind spot, such as a political concern that could arise as an unexpected result of proceeding? This is crucial to ensure that the person or people feel heard as well as to advance the goals of the team. Sometimes all individuals need is a little affirmation before they fully accept your point of view.

• It says a lot about you as a leader to be someone who always lets the perceived greatest idea win, regardless of the originating channel, if after studying and evaluating you see the necessity to align with the divergent position.

• If, after investigation and assessment, you determine that you must adhere to the original strategy, we go to Step 2.

2. Disagree and Commit: Jeff Bezos, CEO of Amazon, has had this experience, and Julie Zhuo describes how he handles it in her book The Making of a Manager.

It's OK to disagree when the team is moving in the right direction, but it's not OK to accidentally or purposefully damage the team's efforts because you disagree. Let the team know your opinion, but then help them achieve company goals even if they disagree. Unknown. You could be wrong in today's ever-changing environment.

So next time you have a team member who seems to be dissenting and you've tried the previous tactics, you may ask the individual in the meeting I understand you but I don't want us to leave without you on board I need your permission to commit to this approach would you give us your commitment?