Good morning, internet! It’s ya boy Taylor, CEO of Hedgehog, where you can sync your whole crypto portfolio for ease of management and peace of mind. Crypto is complex; Hedgehog simplifies the investing process so you can focus on 1) which assets you want to own, 2) in what amounts, 3) over what time period.

In fact, if you’re confused about where to start with your crypto portfolio, Hedgehog can help there too — we offer Stacks of related cryptocurrencies in case you want to focus on a particular sector or a particular type of coin. Hedgehog is registered with the SEC to offer personalized crypto investment advice and we’re currently building out this feature.

Anyway, happy Thursday! As always, there’s a giveaway at the end of the newsletter. Answer my question of the week for the chance to win a Ledger Nano S hardware wallet. Last week I asked if there were more wheels or doors on the planet. 63% of you voted for wheels, and 63% of you were wrong.

Shoutout to one of our readers getting an epiphany in real time: “I was thinking there are more wheels bc there are more cars than houses but then I realized cars also have doors.” Yes, cars do indeed have doors. I can confirm this.

“The Depegging of UST”

Jump Crypto - The Depegging of UST | Jump Crypto
Jump Crypto, a division of the Jump Trading Group, is a global leader in web3 infrastructure development and investment.

Jump Crypto’s in-depth, on-chain analysis of how UST was depegged is just…fascinating. Is it heavy? Yes. Should I have led with it? Maybe not. But if there’s one article you actually click on and read this month, it’s this one. Everyone loves a good ol’ fashioned crypto murder mystery.

Tldr: Colonel Mustard with the Ledger Nano S in the Metaverse.

Next up, it’s our favorite topic: Regulations! SEC! Government! Yay!

“Many of these financial assets, crypto assets, have the key attributes of a security,” said SEC chairman Gary Gensler this Monday. However, he does agree with Crypto Twitter that bitcoin is a commodity.

“Gensler pointedly declined to name any cryptocurrency other than the original one,” Axios reported (note: classic Gensler, you rascal), which is “notable because the market has been operating under the assumption that there is a sort of wink-and-nod understanding that ether is also not a security,” due to previous statements by SEC personnel.

Whether an asset counts as a security or not is determined by the Howey Test, which has four prongs:

  1. It’s an investment of money
  2. In a common enterprise
  3. With the expectation of profit
  4. To be derived from the efforts of others

What’s complicated is that in crypto, “the efforts of others” are often distributed across various different groups and individuals, not necessarily concentrated in a central entity. It depends on the project — many are de facto centralized, but not all. Is Monero a security? What are the boundaries around the definition of “common enterprise”? If I expect my profits to be delivered in the form of dank memes, does that still count?

Tldr: When in doubt, call the lawyers. That’s what my lawyers tell me.

What’s the best industry to pivot into during a global shipping shortage and market meltdown? Smartphone production, obviously.

The newly announced Solana smartphone, called Saga, will be created by the team behind the outage-ridden cryptocurrency. To be clear, it’s not available yet, the project is just getting started. Solana Labs cofounder Anatoly Yakovenko wrote:

[E]very day, I hear stories of people leaving dinners, conferences, and vacations to get back to their computers and sign important transactions. The mints, trades, listings, and transfers critical to the daily life of crypto-lovers are dragging us away from our lives with others. The only companies with the resources to materialize the self-custody mobile future we’re all dreaming of, Apple and Google, have had no updates to give on their roadmaps for crypto.

On the one hand, I see the need. On the other hand, I don’t want to buy a phone from someone whose cryptocurrency has frequent network outages. That seems like a bad sign?

Tldr: Will I need to sell Solana to buy minutes to place phone calls? Do people still buy minutes? I don’t want to buy minutes. Why is this tldr so focused on buying minutes?

Quick Hits

“Web3 is dead, long live Web3: All the juicy details behind my creator economy experiments”
Tldr: Haven’t you heard? We’re on Web 5.0 now.

“Three Arrows Ghosts Kyber Network As Threats of Legal Action Fly
Tldr: Maybe Three Arrows should just… sell one of their arrows.

Fear and Reveling in Goblintown: A Savage Journey into NFT Land”
Tldr: Great use of vocabulary in this title.

“Detecting unauthorized physical access with beans, lentils and colored rice
Tldr: Chipotle should get into the security business. “Secured by your Barbacoa Burrito” has a great ring to it.

Without any further ado, time for the weekly giveaway! For the chance to win a Ledger Nano S hardware wallet, hit reply and answer this question:

You’re a metaverse detective investigating a murder in the market. Your prime suspects:

  • Colonel Mustard with a network outage on Solana
  • Do Kwon with a rug in the Korean Senate
  • Batman

Who did it? Bonus points for detailed explanations.

I’m Batman,
— Taylor

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Header image: AI-generated art provided by @Lumenascent.