4 things that are happening in crypto right now – Feb 2022

Bitcoin surpasses $40,000 in two-week high 

Bitcoin pushed past the ‘key psychological threshold of $40,000’ but is still nowhere near its all-time high of $69,000. The coin has seen high volatility since entering the new year and reached a low of $33,000. To surpass $40,000, it surged 10% in just 24 hours. A U.S jobs report could be the reason for the bullish move with higher wages spurring on crypto investors. Alongside this, an upswing in traditional financial markets may also have been a catalyst for the rising Bitcoin price action. 

Bitcoin Tops $40K for First Time in 2 Weeks, CoinDesk 

Steady gains for metaverse tokens, despite Meta losses 

The Sandbox and Decentraland tokens have seen massive gains upwards of 20% over the past two weeks. On the other hand, Meta reported a decline in Facebook users for the first time ever and a 26% fall in share prices. This decline is thought to be a result of declining interest in Web 2.0 and a turn towards Web 3.0 with its promise of the metaverse and a better internet experience. Decentraland also released its 2022 manifesto and The Sandbox announced a release of more digital land, as well as a partnership with UniX Gaming. 

Rise of Web3: Metaverse tokens surge as Meta’s share price plunges, Coin Telegraph 

The problem with DeFi’s anonymity 

It was disclosed that decentralised-finance project Wonderland is being run by a convicted financial fraudster. After his identity was revealed by an anonymous Twitter user, tokens for Wonderland and its associated projects collapsed, as investors were displeased by the news. The co-founder of Wonderland 0xSifu was revealed to be Michael Patryn, who was also the co-founder of QuadrigaCX, the largest Canadian crypto exchange that misplaced $145 million of customer’s funds in 2018. Wonderland cast a vote to its community: shut down the project or remove 0xSifu as treasurer. It was announced the project would shut down. Shortly after, it was announced on Discord that the project would continue. 

It raises the problem that DeFi is a space controlled by anonymous avatars and pseudonyms. To benefit from the DeFi space, investors have to place their trust and funds in the hands of companies and individuals who have not been background-checked. Is there a decentralised solution to this issue? 

‘This Circus Needs to Stop Now’: How DeFi Protocol Wonderland Avoided Shutdown After Scandal, Decrypt 

The rise of Ethereum 2.0 and fate of layer 2 tokens 

Layer 2 solutions were developed to counter the lack of scalability and the high network fees attached to the Ethereum blockchain. However, ETH 2.0 and the migration to proof-of-stake is set to resolve those issues. This could spell trouble for other open-source blockchain protocols such as Cardano, Binance Smart Chain and Solana. Yet, ETH 2.0 may not provide infinite scalability, so layer 2 solutions may still be necessary. Cardano still has the potential to eventually surpass Ethereum with technical advantages that will become clear as the project continues to develop. 

Could ETH 2.0 Make Layer 2 Tokens Obsolete?, Blockster 

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