Accointing Weekly Crypto News

Accointing Weekly | May 6

Our weekly crypto newsletter is here! In this issue, read more about the Yuga Labs sales that crashed Ethereum, and the Central African Republic adopting BTC as an official currency. Also, learn more about liquidity mining and yield farming, and see if our tax software would be right for you!

Yuga Labs sales overwhelm Ethereum

Yuga Labs, the creators of the famous Bored Ape Yacht Club & Mutant Ape NFT collections, launched a sale last Saturday for 55,000 virtual land plot NFTs in its upcoming Metaverse project called “Otherside.” With an average price of $5,800 per plot, they raised $320 million in crypto, and according to CryptoSlam, secondary sales have already reached $586 million.

The demand was, in fact, so strong that the activity affected the entire Ethereum blockchain. Regular transactions slowed down for hours, and the average gas fee for minting one plot reached around $6,000 or 2 ETH, with some buyers reporting paying up to $44,000. According to Etherscan, the total activity totaled approximately $120 million in gas fees. Experts say this could have been avoided, at least partially, if Yuga had chosen to implement any gas-optimization feature in the smart contract related to the sale.

Meanwhile, what “Otherside” is, besides a money-making machine for Yuga Labs, remains unclear. So far, selling hot NFTs and expanding the BAYC brand seems easier than building a Metaverse that people could use. Thus, it’s hard to estimate if investors and speculators would see a significant ROI, especially if we take into account the recent Wall Street Journal report, which stated that NFT sales are down by more than 90% from their peak in September last year.

The Central African Republic (CAR) is the second country in the world after El Salvador to adopt Bitcoin as an official currency. The bill was unanimously adopted by all lawmakers in the country, making Bitcoin an official currency alongside its CFA franc and legalizing the use of all cryptocurrencies. Adopting cryptocurrencies as official currency means that gains and losses incurred by trading are not to be taxed. 

The Central African Republic is one of the poorest in the world, with a population of less than 5 million, only around 11% of whom have access to the internet. The International Monetary Fund criticized the decision, stating that the adoption of Bitcoin as a legal tender “raises major legal, transparency, and economic policy challenges.” The bill was also passed without consulting the regional Central Bank, which manages a common currency for six countries, including the CAR.

DeFi: Yield Farming & Liquidity Mining

Some of the biggest advantages DeFi offers when compared to the traditional banking system are yield farming and liquidity mining. Thanks to yield farming, investors can lend their crypto assets in a liquidity pool through a smart contract. These pools use the invested crypto from other people to enable borrowing or exchanging one token for another on the corresponding platform.

The assets are then lent by the protocol and the owners are rewarded with an annual percentage yield and sometimes a native token. Liquidity mining takes things a bit further as the investor has to provide two assets instead of one. Their tokens are used by the platform and the owners are rewarded with the native token and a percentage of the fees. Yield farming and liquidity mining are clearly an advantage over traditional banking as there’s no middleman and it’s the user who profits the most. 

Read more about yield farming and liquidity mining in this article on our blog!

Advice from our CPA: Reasons to choose Accointing.com for your crypto taxes

Our US crypto tax expert, David Canedo, doesn’t have a marketing degree. He’s just a simple crypto enthusiast and a US taxpayer, who decided to sum up all the reasons why you should go for our crypto tax software. Here’s David’s list:

  • You currently don’t have a tax tool
  • You are paying more for your current tax tool than your portfolio is up for the year
  • Your current tax tool doesn’t come integrated with an awesome crypto tracker available for iOS and Android
  • Your current tax tool is giving you incorrect reports and seemingly malfunctioning
  • Your current tax tool is too difficult to use to takes too long to process data
  • You are using a free service – free comes at a cost
  • You are a degen – Accointing.com is considered by many to perform best with DeFi
  • You want a reliable, easy to use crypto tax solution that includes a tracker and other tools such as the TTO
  • You want to get your crypto taxes done with minimum effort – the software will handle the difficult parts of crypto
  • Accointing.com is Swiss-made

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