Crypto 101

Crypto in 2020: 3rd Quarter

Welcome to part three of the Crypto Year 2020 Review. We are now in the 3rd quarter where we will look back at the gloomy COVID Summer, from July to September.

If you haven’t seen the Q1 and Q2 here they are:

DeFi’s Summer

July-September

DeFi protocols like Aave, Compound, and Maker gathered steam this past summer, in what has become one of 2020’s biggest crypto crazes.

They take the form of non-custodial money management platforms that allow users to lend and borrow crypto. Part of the reason they surged this past summer is that the governance tokens awarded to them are a way to incentivize users; for instance, if one lent crypto on Compound, $COMP can be earned, which will give a certain amount of power to vote on the proposals to upgrade the network.

However, traders were more interested in tokens like $COMP for their potential value than their ability to “govern” DeFi platforms. Yield farming has been produced when traders began exploiting protocols to assemble valuable governance tokens, then lending or borrowing in earnest.

In late July, DeFi had grown into a $3B industry because of the contributions of developers like Andre Cronje, Yearn Finance’s creator. Yearn’s governance token, YFI, was at some point, trading for $43,000. Cronje said that the token was designed to be “completely valueless.”

“Don’t buy it,” he wrote, and no one paid attention.

NFTs’ Invasion

July, and the rest of the year

Non-Fungible Tokens, or NFTs, are a kind of blockchain-based collectible that became popular this year with the rise of marketplaces like Nifty Gateway and the virtual collection space Decentraland, which is like Second Life, but with NFTs as stand-ins for real-world objects.

NFT sales hit $100M in July, and have been steadily increasing ever since.

As months went on, developers found fresher uses for NFTs, from fractionalized digital art sales to collateral for DeFi loans or Derivatives.

Twitter Gets Hacked

July 15

Someone hacked into the world’s most influential Twitter accounts.

When hackers trespassed some of Twitter’s biggest accounts in July, they just asked people to send them Bitcoin promising that they will double it.

The hackers walked away with over $120,000, and Twitter has been forced to shut down all posting privileges for verified accounts, which was only for about ten minutes.

Dogecoin Takes Over the World!

July 17

Elon Musk, the founder of SpaceX and Tesla, tweeted a meme about how Dogecoin – a meme coin – was going to take over the world. Extraordinarily, the tweet pumped the price, and also the power of Musk’s whimsical musings.

MicroStrategy Kicks Off Bitcoin Binge Buying

August 11

Before summer, MicroStrategy was just a tech company. But CEO Michael Saylor’s bet on Bitcoin in August raised its profile remarkably and marked a watershed moment for institutional crypto investment.

The company went on to put another $225M into the asset, later on, Saylor makes breathless statements like;

“God’s name is Satoshi.”

Analysts from Citi have downgraded MicroStrategy’s stock in December, indicating the company’s imbalanced focus on Bitcoin.

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