The Weekly Wrap – Parachains, U.S. Fed, Tether

1. First Polkadot Parachains to go live

The Facts:

• On Thursday, the fifth parachain auction on Polkadot concluded, with Clover Finance securing the spot.
• The fifth auction, being the last from the first badge is in line with the going live of all five projects on December 18th.
• Polkadot announced a Party, celebrating the significant achievement after 4 years.

Why it’s important:

• More than DOT 99 million have been raised in the first five auctions.
• Project tokens are expected to be partially distributed to participants once the projects are live.
• On December 23rd, the next five auctions will proceed.

2. U.S. Fed tightens tapering measures

The Facts:

• The U.S. Federal Reserve announced the intention to accelerate the reduction of its monthly bond purchases.
• Starting in January, the bond purchases will be reduced to $60 billion, therefore half the amount of the November taper and $30 billion less than it had been buying in December.
• The Federal Open Market Committee adjusted its inflation outlook for 2021 to 5.3% from 4.2% for all items.

Why it’s important:

• After the tapering measures have concluded, the Central Bank expects to raise interest rates.
• First indications see as many as three rate hikes in 2022 and two more in 2024.
• Meanwhile across the pond, the Bank of England increased its main interest rate from its historic low of 0.1% to 0.25%.

3. New Tether lawsuit

The Facts:

• A class action lawsuit was filed against Tether. The second one in a time span of 4 months.
• The document submitted by the plaintiffs accuses the firm of falsely representing its stablecoin’s backing.
• The plaintiffs focus on Tether apparently misleading consumers regarding attributes of their tokens, by claiming that USDT was 100% backed by U.S. dollars.

Why it’s important:

• Earlier this year Tether released a reserves breakdown, with commercial paper forming the majority of its cash and cash equivalent category.
• In October the firm was fined $42.5 million by the CFTC over its claims of being fully backed by US Dollars.
• The saga of how many USDT are indeed backed by the US Dollar continues. YTD the supply quadrupled from $20 billion to almost $80 billion.

In other news

• Another Bitcoin Core developer steps down. (via Cointelegraph)
• Polygon hard-fork. (via Newsbtc)
• Bitwise NFT Index Fund. (via TheBlockCrypto)

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