August 12, 2022

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Is Circle Insolvent, and If So, What Does That Mean for USDC? Let's Look... Featured

TL;DR You can skip past all of this and just Download the full Circle report here- Circle's USDC Stablecoin Analysis.

Bloomberg reports in its Technology section, ‘Terra $45 Billion Face Plant Creates Crowd of Crypto Losers’ and “ ‘Everything Broke’: Terra Goes From DeFi Darling to Death Spiral” wherein they detail the failure of what they (as an old school concern) say are shortcomings in crypto and DeFi. Terra’s problem was very, very simple, yet many either ignore it or fail to understand it. They based their entire system on a methodology that has not proven to work over time, since inception – at least not yet. That methodology is stabilizing digital assets in a “centralized” decentralized market (ex. fractured pricing and liquidity) around a traditional asset that does not exist natively on the blockchain. A shorter way of saying that is algorithmic stablecoin. To my knowledge, and I may be wrong here, every stablecoin that has had significant volume has broken the buck under pressure. Now, physically backed stablecoins have broken the buck as well, but you always have good ole fashion human greed manifested through arbitrage to save the day there. This greed factor works in the opposite direction when it comes to algo coins. This is not a secret hence no one should have been surprised about what happened over there at Terra Labs.

My name is Reggie Middleton, and I’m the storied, founder and patented (US11196566 and JP6813477) creator of DeFi.

I’m here to truly educate you…

Bloomberg also reported in its “Finance” section: “The Crisis at Celsius Is Rocking DeFi and Crypto”. I mention the sections because nuance is actually very important here. Crypto, and more to the point, DeFi, is nearly purely technology and IP driven. It is not finance, it is technology – a technology that can be used to dramatically improve finance, but technology, nonetheless. Those that fail to understand this are quite likely toing to get their $sses handed to them over time. Further to the title of the article, this has nothing to with DeFi. It is CeFi (centralized finance, yes – that traditional stuff) which is rocked by this scandal, and it is CeFi which funds, operates and is most effected by the profligate consumption of risk over reward that is common between all three of the aforementioned articles, the extant and current news cycle and unfortunately, this report as well.

The media is not anxious to report the truth and facts, for if it was you would have heard of me a long time ago. The negative and unproven allegations against me actually do catch wind in the media, but the proven and positive accomplishments haven’t been covered since 2014, write about the time I invented DeFi - which is also quite unfortunate, Draw from that what you may. I digress, thus back to the topic at hand and the tenor of the Bloomberg articles…

Reference the latest funding rounding Circle Internet Financial – a prominent crypto company that issues the number two stablecoin in the industry, above that of the recently demised UST from Terra labs They are similar in operations to Celsius, BlockFi, Genesis Trading, etc. in that they use the products of DeFi technology to conduct CeFi and TradFi (traditional finance) business. What’s wrong with that? Well, imagine tacking a high-powered Tesla Plaid motor onto a horseshoe, then writing articles about the shortcomings of electric care technology when the horse breaks its leg! Yep!

Now, note that DeFi protocols, which are purely (or at least, they’re supposed to be) smart contract driven, are humming along just fine.

This goes to show that the media, the management and above all, the regulators, still have no clue as to what this space is about.

It is about technology and IP, just like the internet in 1995. No one should be trying to make IP packets securities and tradeable, speculative SEC-bait, and doing so now will not work any better than doing so then.

Download the full Circle report - Circle's USDC Stablecoin Analysis.

Note, this report was researched and completed in around 24 hours. If you think it is hard hitting, wait until you see our upcoming Coinbase report. Brrrr....

Here are some timely tidbits for those who simply can't wait to read good stuff!


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Last modified on Friday, 01 July 2022 15:30
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