Celsius Network Halted

Web5, Artist Spotlight: iamlaurael, & More

June 14, 2022

Welcome to The Drop NFT Newsletter. Breaking NFT news, project breakdowns, & artist spotlights - We do the heavy lifting so you don't have to! Join our Discord to win raffles and allow list spots!

What's Dropping ⚡️

  • Let it be known that staff here at The Drop remains convicted regarding crypto and NFTs, but not naively so. Go with your gut and play the long game if you are able to do so. It is only a matter of time before we bounce back, and the sling is wrenched back far.

  • Crypto prices across the board are tanking as we approach "rock bottom". (BTC $20,980, ETH $1.1k)

  • The market is so bearish that the crypto exchange Celcius has halted all withdrawals for customers. Something that they tweeted and advertised they would never do... more on that later. (The Guardian)

  • The Governor of Colorado is fundraising with his own NFT collection. We'll see how this leads to more influential figures utilizing crypto. (Axios)

  • Blockchain.com partnered with Unstoppable Domains to bring free web3 domains to the public yesterday. Join the waitlist here.

  • Movienftz is an upcoming collection consisting of prior feature film posters. First to drop will be 200 Resident Evil: Welcome to Raccoon City posters directly to Open Sea.

  • Metaverse Nike brand RTFKT is teaming up with Byredo to develop Web 3 perfume collection.

Celsius Network Halted 😡

Over the course of the past 2 weeks, the NFT space has been hunkering down in anticipation of a bear market. People have tossed around the idea of the Ethereum price tumbling to $1,000 per coin, which has nearly come to fruition (price at time of writing = $1,097). This price action is definitely not ideal, considering that Ethereum was at an all-time high of $4,811 on November 17, 2021. But imagine not being able to utilize the Ethereum that you assumed you would still have access to. What would you do? That’s precisely what Celsius has seemingly done to its users.

What is Celsius?Celsius is a centralized DeFi platform that allows users to deposit their crypto in return for an interest payment. For example, if I deposit my USDC into Celsius, I can earn an APY of up to 9.2%. They advertise rates of this caliber because they use those funds to produce even more capital. If a depositor is yielding 9.2% on their USDC, they are making a percentage in the background by executing arbitrage trades, and lending out money to larger institutions. The money that you deposit goes into a general “pool” of funds that is then invested and traded. Through this style of pool lending, and other high-gain opportunities, Celsius was able to grow to a valuation of $10 Billion.How We Got HereDespite feeling like ages ago, the Terra LUNA crisis is still haunting Crypto institutions, Celsius included. The company’s exposure to $UST is upwards of $500 million, meaning that liquidity has pretty much been drained. Celsius also promises interest on Ethereum deposits, which are comprised of staking rewards of the Ethereum Beacon Chain. This liquidity cannot be touched for now, thus locking up those funds as well. Lido protocol bypasses this by issuing you $stETH for your staking ETH. $stETH is not pegged to ETH, meaning that the price can vary at any moment, and can also result in being negative, financially.

What's Going OnWhen crypto prices drop, vast amounts of people rush to platforms to remove the money that they have tied up in Crypto in order to protect their fiat funds. Celsius locked up a majority of its liquidity to make more money for its users, some of which cannot be touched for a long time. Because of all the arbitrage opportunities that Celsius employs, they have had issues withdrawing users’ funds, and as recent as June 12, they announced they will be suspending all withdrawals, swaps, and transfers. It’s safe to say that people are scared. They don’t know if they will get their money back, or if the “Coinbase-clause” (they keep all your crypto in the case of bankruptcy) will actually come into play. We will have to wait and see. In the meantime, relax and go smell the grass. WAGMI.   

As you can see, people are not happy about the blatant false advertising (allegedly).

 Jack Dorsey Announces... Web5? 😅

According to Jack Dorsey, if the goal for Web3 was to provide a decentralized infrastructure, then it has missed the mark tremendously. In his eyes, its decentralization has been compromised by big capital that has effectively centralized many chains. Web5’s goal is twofold; the first priority is to base Web5 on Bitcoin as its exclusive blockchain, and the other is to prioritize user experience. Although ownership over identity and personal data are often cited as elements that distinguish Web3 from Web2, the ecosystem as a whole doesn’t necessarily provide a productive environment for users to take advantage of this feature for items they are used to doing in Web2. Or in other words, the use case for Web3 is currently very different than the needs of people who depend on Web2.

If you want to listen to music, or if you want to use a navigation application, neither of these services are available in an appealing format within Web3. This has partially to do with the fact that Web3 is currently preoccupied with trying out different chains and producing new tokens. Web5 wants to defer entirely to the existing and very decentralized Bitcoin blockchain, and focus entirely on the development of various applications. Identity and personal data will be possessed entirely by users through decentralized data, and identity storage protocols will be able to leverage that data to use different applications. In practice, this would look like a user being able to switch from Twitter to a different Twitter-like app seamlessly because they can reproduce their user profile with all of the Tweets they’ve ever published on a different app. Web5’s user experience and application-centered approach could bring refreshing new use cases to the decentralized ecosystem.

Artist Spotlight 🎨 @iamlaurael

Since iamlaurael joined the NFT space just a few months ago, she has captured collectors' minds and hearts with her 1/1 collection, The Lurkers. Prior to NFTs, she had worked as a full-time commission artist creating "storybook illustrations" for her clients. Over the years, she developed a unique style and the remarkable ability to tell stories through a single image. The Lurkers is a 23-piece storytelling series. Through illustration, subtle animation, and music, iamlaurael tells a new part of the story with each drop. The storyline revolves around dark spirits known as Lurkers who follow children that have bad thoughts or negative emotions. If the children give in to evil, the Lurkers snatch them into the underworld and feed on their darkness. With the latest reveal of Lurkers #016, we watch as one of the Lurkers loses interest in the evil children and is instead captivated by a very special child. How will this story end? Find out for yourself by following @iamlaurael as she gears up to reveal and auction off the final 7 pieces in the series.

Lurkers #000

We may be in a bear market but that hasn't stopped artist iamlaurael from setting new ATHs with her storytelling collection, The Lurkers. She was the first female 1/1 artist to break 100 Sol sale and was just featured in @CozomoMedici's Medici Minutes bringing more attention to the fast-growing 1/1 space on Solana. Currently here Lurkers series sits comfortably at a 180 SOL floor.

🚨 Were you can find iamlaureal: Twitter, The Lurkers Collection, Instagram

Meme Drop 💧

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Disclaimer: The Drop DOES NOT provide financial advice. All content is for informational purposes only. The Drop is not a registered investment, legal, or tax advisor or a broker/dealer. Trading any crypto-related asset is extremely risky and could result in significant capital losses. 

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