Five big stories this past week, from Arbitrum airdrop to Coinbase perps

Quick Take

  • The past week saw several major stories making headlines, including an Arbitrum airdrop, a TerraUSD probe and Euler Finance hack.
  • Here’s a quick recap of  these stories.

The past week was busy in the crypto world, with five major stories making headlines.

Ethereum Layer 2 Arbitrum announced a schedule of its long-awaited token airdrop. The U.S. Justice Department began investigating the collapse of the TerraUSD stablecoin. DeFi protocol Euler Finance lost $197 million in a flash-loan attack. Meta ditched NFTs on Facebook and Instagram, and Coinbase is exploring an overseas derivatives trading platform.

In this recap, let's take a closer look at each of these five stories.

Arbitrum airdrop

Arbitrum, the biggest player in the Ethereum Layer 2 space, said it will airdrop its ARB governance token on March 23, distributing 12.75% of the token's total supply to community members who have used the network over the past year.

Arbitrum once said it wouldn't launch its token. Still, now the project argues that the token is needed as part of its next phase of decentralization. ARB will control the governance of the Arbitrum One and Nova networks through a DAO. It will also be used to govern any other Layer 2 networks that the DAO officially endorses. The token won't be used for paying transaction fees on the network.

Besides 12.75% to the community, the ARB airdrop will hand out 11.6% of the total supply to Arbitrum users, with an additional 1.1% to DAOs in the Arbitrum ecosystem and Protocol Guild, a DAO made up of Ethereum developers. A large portion of the supply — 42.8% — will go to the Arbitrum Foundation, which will be under the control of the newly formed Arbitrum DAO.

Offchain Labs and advisers will receive 27% of the token's supply, while Offchain Labs investors will get 17.5% of the supply. The total supply of tokens is 10 billion.

TerraUSD probe

The Justice Department began investigating the collapse of the TerraUSD stablecoin, according to a report from The Wall Street Journal, citing unidentified sources.

Terraform Labs and its co-founder Do Kwon are already facing civil charges brought by the U.S. Securities and Exchange Commission last month. If charges are ultimately brought by the Justice Department, those would be criminal and could carry a prison sentence.

U.S. prosecutors are also looking into chat-group conversations among trading firms including Jump Trading Group, Alameda Research and Jane Street Group about a potential bailout of TerraUSD that never happened, according to a separate Bloomberg report on Monday.

The TerraUSD stablecoin lost its peg in May last year and wiped out about $40 billion in market value. Its failure caused a ripple effect throughout the market, resulting in the collapses including Three Arrows Capital, Celsius, Voyager, BlockFi and FTX.

Euler attack

DeFi lending protocol Euler Finance lost $197 million in a flash-loan attack. The attacker then transferred about $1.8 million to cryptocurrency mixer Tornado Cash in an attempt to launder the stolen funds.

Euler Finance offered the attacker a 10% bounty ($19.7 million) to return the remaining 90% of the stolen funds. It warned that if the assets were not returned within 24 hours, it would launch a $1 million reward for information that would lead to their arrest and the return of all funds.

Earlier Saturday, the exploiter returned 3,000 ether (ETH) worth about $5.4 million to Euler, indicating a deal may have been reached.

Euler Finance is backed by high-profile investors, including Haun Ventures, Jump Crypto and Uniswap Labs Ventures, having raised $32 million in a June 2022 funding round.

Meta ditches NFTs

Meta ended NFT support on Facebook and Instagram "to focus on other ways to support creators, people, and businesses," said the head of the company's commerce and fintech business, Stephane Kasriel.

The initiative lasted about five months. The reaction was mixed, as The Block reported. One artist, Dave Krugman, called the move "shortsighted." Still, a critic said if the initiative had been successful and popular, Meta wouldn't have discontinued it.

The winding down of Instagram's NFT program may have an impact on Polygon, the blockchain company Meta chose to help it run Instagram's NFT play. Polygon was disappointed by Meta's sudden move to end the initiative, according to a person familiar with the matter.

Coinbase perps

Crypto exchange Coinbase is exploring launching an offshore platform to trade perpetual swaps tied to cryptocurrencies, The Block reported, citing unidentified sources.

Coinbase has briefed market-making and trading firms about the plans to roll out the platform in an offshore jurisdiction. Perpetual swaps — a type of future and a popular product in the crypto space — will be among the offerings. They provide a more capital-efficient way for traders to make bets on the underlying crypto market.

Coinbase rival Binance currently commands a plurality of market share in bitcoin futures, according to The Block's data dashboard.

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