To entice traders to burn luna to create UST, creators offered an insane 19.5% yield on staking -- which is essentially crypto terminology for earning 19.5% interest on a loan -- through what they called the Anchor Protocol. Instead of parking your savings at a bank for a 0.06% interest rate, the pitch is to turn put your money into UST, where it can earn nearly 20% in interest. Before the depegging, over 70% of UST's circulating supply, around $14 billion, was deposited in this scheme. What can you buy with Bitcoin? Anthropic's latest reported valuation peaked at $18 billion in December 2023, implying a value of around $1.4 billion for FTX's stake.
Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets. Crypto.com Teams Up with PayPal and Paxos to Further Enable PayPal USD (PYUSD) "What this episode, this crash in crypto prices, shows is that cryptocurrencies are by and large speculative financial assets that are subject to macroeconomic forces, such as changes in interest rates," says Eswar Prasad, an economics professor at Cornell University.