Now You Can’t Blame the Ethereum Foundation 🥲

Hi! I’m Juan Aranovich, managing editor of Unchained.

In today’s edition:

• 😭 Trump’s tariffs tank token markets

• 🚨 Venice’s VVV crash: Inside job?

• 💰 Tether profits soar

• 🔥 Sky’s USDS stablecoin surges

• 📉 Bitcoin transactions hit 11-month low

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ETH Crashes After Trump Imposes Tariffs 

A wave of panic selling sent major digital assets into a downward spiral after U.S. President Donald Trump slapped tariffs on imports from Canada, Mexico, and China on Saturday.

Ether slumped by as much as 27% — its biggest intraday drop since 2021 — while bitcoin fell approximately 6% to around $93,000. The entire crypto market lost $400 billion. 

A total of $2.27 billion has been liquidated across major crypto exchanges during the past 24 hours, with ether alone accounting for $616 million of liquidations. 

The sell-off was one of the largest single-day liquidation events in the history of crypto, eclipsing both the Covid crash and the slump following the collapse of FTX.

Although crypto was the first major risk asset to respond to the tariff announcement, fears of a global trade war sent U.S. stock futures lower and the dollar higher, signalling that more volatility is likely during the next few trading sessions. 

Venice AI’s VVV Sinks Amid Insider Selling Claims

Venice AI’s VVV token has lost 80% of its value in the past seven days and the team behind the platform is now facing scrutiny over its token sales.

Castle Labs onchain analyst Amir Ormu said on X that data suggested that some team members had received tokens four days before VVV’s official launch and had sold them immediately afterwards.

VeniceAI’s team holds 23% of VVV’s total supply, and the team wallet reportedly funded 16 different wallets before the token was launched. Ormu said the wallets sold at least $10.2 million worth of the pre-allocated tokens.

VVV’s drop follows an initial surge in demand during its airdrop and subsequent listings on major exchanges such as Coinbase.

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Tether Reports $13B Net Profit for 2024

Stablecoin issuer Tether had a record-breaking 2024, reporting a net profit of $13 billion for the year — including $6 billion generated during the fourth quarter alone. 

The firm’s exposure to U.S. Treasuries reached an all-time high of $113 billion and played a crucial role in boosting its profits as interest rates stayed high.

Tether issued around $45 billion in USDT last year, $23 billion of which it issued in Q4. It also holds nearly 84,000 BTC valued at about $7.8 billion. 

Tether continues to lead the stablecoin market as the largest issuer, with its USDT token accounting for more than 63% of the sector. 

Sky Protocol’s USDS Supply Grows Over 2,000% in Five Months

Sky Protocol appears finally to be reaping the rewards of its change in strategy after a rebrand from the name MakerDAO last year.

The supply of its native stablecoin, USDS, has grown 2,255% during the past five months, from 98.5 million to 2.32 billion.

Meanwhile, the supply of DAI dropped 31.5% over the same period, from 5.29 billion to 3.62 billion. 

In October, Sky considered shifting back to its original MakerDAO brand. At the time, only 10.7% of MKR token holders had converted to the new SKY governance token.

Bitcoin Transactions Drop to Lowest Level Since Last March

Bitcoin has seen a significant decline in transaction volume, reaching an 11-month low.

According to Julio Moreno, head of research at blockchain data and analytics firm CryptoQuant, the Bitcoin mempool is “practically empty” and fees are currently around one Satoshi per virtual byte.

The drop in network activity resulted in multiple blocks being mined without being fully filled with transactions.

Monthly transactions are currently down 43% from the network's all-time high monthly transaction count last October.

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• 🇸🇻 El Salvador continues accumulating bitcoin despite new restrictions under a $1.4 billion IMF deal that limits public-sector involvement in crypto as President Nayib Bukele boosted the country’s holdings to more than 6,055 BTC valued at nearly $570 million.

• 🔄 Uniswap V4 launched with major upgrades, introducing customizable swaps, gas fee reductions, and “hooks” that allow developers to build unique liquidity and trading strategies, while expanding to Ethereum, Polygon, Arbitrum, Base, BNB Chain, and other networks. 

  Watch this Unchained episode with Uniswap founder Hayden Adams to learn more about the v4 upgrade. 

• 💰 MicroStrategy raised $563.4 million through its STRK preferred stock offering, significantly exceeding its initial goal, with plans to funnel proceeds into further bitcoin acquisitions, boosting its holdings to 471,107 BTC worth more than $46 billion.

• 🚀 Elon Musk’s father, Errol, endorsed the “Musk It” memecoin, hoping to raise as much as $200 million for engineering research think tank the Musk Institute, after the Solana-based token surged more than 200% in 24 hours following news of his public support, although it was originally launched by a Middle Eastern firm in December.

• 💰 Digital asset settlement network THORChain approved a proposal to convert $200 million of debt into equity, issuing new token TCY that will grant creditors 10% of the network’s revenue indefinitely. The move is part of a 90-day restructuring plan following the suspension of key services due to financial instability.

• 🇮🇳 India’s government is reconsidering its strict stance on cryptocurrencies, with the economic affairs secretary citing shifting global attitudes, although the rethink could further delay a long-awaited regulatory discussion paper originally due for release last September.

• 🏦 UBS completed a proof-of-concept using ZKsync’s layer 2 technology to explore scaling its Key4 Gold offering, which allows Swiss clients to invest in fractional gold with real-time pricing and secure storage.

• ⚡ SoftBank invested $50 million in Cipher Mining, securing 10.4 million shares and an exclusivity agreement for its 300 MW Texas artificial intelligence and bitcoin mining site, a development analysts see as part of a broader trend of miners diversifying into AI infrastructure.

• 📈 Coinbase acquired Spindl, an onchain advertising platform founded by tech entrepreneur Antonio Garcia-Martinez, and will integrate it into Base, its Ethereum layer 2, while maintaining open standards for publishers and advertisers.

1. Bitwise CEO Matt Hougan on why he thinks crypto’s traditional four-year cycle is over

2. Daejun Park from a16z Crypto on formal verification of Pectra systems 

3. DL News: MicroStrategy-inspired Ethereum fund refunds depositors after debut flop