The biggest news over the past week in general has been Tesla CEO Elon Musk’s takeover of Twitter, and this development could have huge implications for bitcoin and other crypto assets. While most of the news around the shakeup at Twitter has had to do with potential changes in moderation policies, the relevant point for those in the crypto space is that there is now a crypto advocate in control of one of the largest social media platforms in the world. The move has led to a rise in the price of Dogecoin over the past week, and Binance has also purchased influence over the future direction of Twitter through their assistance in Musk’s Twitter takeover deal.
In addition to the Twitter news, there was also an interesting study released this week. This is regarding the amount of tokens listed on decentralized exchange Uniswap that are outright scams. However, the implications of this study may be overblown.
It has been confirmed by a variety of sources that crypto exchange Binance was one of the entities behind Elon Musk’s bid to overtake social media giant Twitter. The final price tag on Musk’s purchase of Twitter was $44 billion, and Binance contributed $500 million towards the cause. So, what is the crypto exchange expecting to get as a return on this investment? According to CEO Changpeng Zhao, the deal intends to give the crypto community as a whole a seat at the decision-making table of one of the internet’s most important platforms.
Additionally, Binance sees opportunities to help Twitter continue their move into the crypto space via various integrations. Twitter has already enabled the ability to tip other users via Bitcoin’s Lightning Network. Also to show off their non-fungible tokens (NFTs). However, Zhao is of the belief that there is much more Twitter can do to embrace Web3. Of course, there are likely selfish reasons for Binance to make this investment as well. This is as they’d like to be a key partner in helping Twitter build out more crypto-related features on the social media platform.
In the past, Musk has had private text messages revealed in court that indicate interest in using crypto. This is to solve Twitter’s issues with bots and fake accounts. Musk initially did discuss using Dogecoin to target the problem. However, it was discovered that this plan may not be practical. For now, it appears that Musk will enable a subscription model for Twitter that includes payment options that are already live on the platform.
Uniswap has been one of the most successful projects in the decentralized finance (DeFi) space over the past few years. However, a new study (PDF) has found that the decentralized exchange is a hub of fraudulent crypto activity. In the study, 97.7% of all of the tokens on Uniswap were rugpulls. A rugpull is a bit of slang in the crypto world. This is for a project where a token sells or a bunch of crypto collects for another reason and then the developers run away with the money.
The large amount of fraudulent activity happening on Uniswap should not come as a surprise. This is as the list of tokens on the decentralized exchange you can find there because they do not meet the standards of traditional, centralized exchanges. That said, the implications of this study could be a bit overblown. The main selling point of the study is about the number of token listings rather than actual trading volume. Tokens that are most popular/trade on Uniswap, we can see that fraud is not much of an issue.
For example, the vast majority of the volume on Uniswap and most other DeFi protocols is done via regulated stablecoins like USDC and USDT. The most popular token, outside of the ones pegged to BTC /U.S. dollar, traded on Uniswap over the past 24 hours was SHIBA INU at roughly $5.5 million worth of trading volume. For comparison, USDC did roughly 100 times that volume over the same time period. The reliance on centralized stablecoins may be a more realistic issue for Uniswap to worry about than the rugpulls.
Dogecoin Price Doubles in Crypto
Getting back to Musk’s Twitter takeover, Dogecoin has hugely benefited from the news. The altcoin has more than doubled its dollar-denominated price since late October. There is speculation Musk will try to bring his favorite cryptocurrency to the platform in one manner or another. One should not that BTC and ether are already part of the social media giant’s payment options. There have been no clear statements from Musk regarding the potential addition of Dogecoin to Twitter. However, that has stopped the price from moving upwards on the news. This is as the price of Dogecoin is effectively pegged to whatever the Tesla CEO has to say about the altcoin.
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