In this blog, I have reviewed several cashback earning crypto cards, including that of CDC, Coinbase, Fold, CoinZoom, and Wirex. It is very safe to say that Blockcard is easily the least known cashback earning debit card. I mean, as of writing this blog (7/23/2022), the total spend made by all Blockcard users in last 24 hours is rougly $22k. Some of you spend more than that on a single afternoon!
If you are not aware of this card (you likely aren’t) and you’re curious to know how it worked, I suggest reading this review of mine. That review was easily the most extensive review of Blockcard but that doesn’t require much when almost nobody is covering the card and those who do are either intentionally or unintentionally misleading their audience.
Anyway, in that review I called Blockcard the best and worst crypto card and part of the reason was the token had a floor price. Unbanked (formerly known as Ternio), the company behind Blockcard would not sell UNBNK (previously TERN) for less than 0.008 floor price.
On one end of the spectrum there were customers who bought the UNBNK token at 0.008 and would only use the card when the price was high enough to break even or generate profit. For example, 6% cashback card holders who were able to grab UNBNK at 0.008 could use the card when price was 0.0078 or higher and they would still be in profit after 6% cashback. On the other end were customers who would buy at 0.008 and spend the token at lower price, thus netting profit to the company.
So, part of the appeal of Blockcard was that you were guaranteed a floor buying (not selling) price. This meant that the price would hover around this floor price of 0.008. The price would constantly bounce back to 0.008 (see review post for details) so dumping it at break even price wasn’t difficult.
Anyway, on Jun 23, 2022, the CEO of Unbanked, Ian Kane, announces in Discord that 0.008 peg was about to be removed in a few hours. Yes, they spend years bragging about the peg yet removed it with hours notice.
The move was so rushed that exactly a month later, their website still mentions that UNBNK has a floor price of 0.008 (screenshot below). I am sure they will remove it when they read this article 🙂
So what followed the sudden removal of the peg? Some people brought up the fact that Unbanked team had said they would never change 0.008 peg. It is most interesting how the coin had a floor price even prior to that and how 0.008.
A few others were bold enough to accuse Unbanked of market manipulation:
A simple question I had asked in Blockcard review is still relevant – how can a token in free market hold a constant price that it isn’t pegged to? Recently, from around April 21, 2022 to 16 June, 2022 the price of UNBNK was exactly 0.0078 (see screenshot below).
The above screenshot also shows that once the peg was removed the token price fell in full force. As of today, 7/23/2022 (exactly a month after peg was removed), the token price is roughly 42% lower than its previously pegged price.
New System Explained
Although Unbanked removed the peg in hours notice, they were kind enough to give adequate notice on a blog post that would explain how the new system would work.
Yes, that is a screenshot of a CEO of a company, literally getting 9 reaction in an official channel supposedly filled with 10k people. Supposedly the company has 40 staffs so I am very curious if the remaining 31 did not get the notice to hit the like button. Anyway, joke aside, here is the official explanation page that beats around the bush and doesn’t really explain much of anything (well, beside the basics of how a market works).
Is it Actually Usable Though?
I bet some of you were thinking something along those lines of “who cares about the nonsense, please tell me if I can milk it”. Unfortunately the answer, for vast majority of you, is a flat no. Yes the card promises 6% cashback but the order book continues to remain super thin. For example, the screenshot below says that a total of $387.95 spend by all Blockcard users will push the price down to 0.00465. Then an additional $1000 will push the price down to 0.00462 and so on.
If you want to experiment with the card, I suggest the following:
- carefully read the review. A few things in the review are now dated but there is plenty of useful stuff there.
- get the 6% card. It costs 145,000 UNBNK token for 6% card which at current token price of 0.0047 is roughly $680.
- Find a cheap and easy route to fund your blockcard. I might suggest going through the bank account you can open with them. If you do crypto deposit, you will lose a little bit of money converting from fiat to crypto and then from crypto to UNBNK. Additionally, there is a risk of delay in deposit and price going up/down between that period.
- Although they promise 6% cashback, be prepared to accept that cashback might be worth half as much in value by the time you can redeem it (a month later). I suppose 3% cashback isn’t too terrible but it is a good idea to set expectation low.
Closing Thoughts
As evident by discord activity, daily card volume, social media interaction, etc they never had enough users to naturally sustain a 0.008 peg so once the peg was removed, the token price obviously went on a free fall. Why was there a need to remove the peg in hours notice? Why not give a weeks notice when removing a core belief of your product? It is likely because more people would have taken the money and run at a higher price.
So, who profited from the sudden removal of peg? Was it the HODLers who have an unrealized loss of 42% value in less than a month? Was it the company that bragged about 0.008 peg, removed it in hours notice, and thus allowed itself to buy something they sold at 0.008 at much cheaper price? As of today, anyone who bought UNBNK at 0.008 can swipe the card for 42% less in value (in other words, the company is buying the token they used to sell at 0.008 at a 42% discount rate).
Who would have thunk that a 6% card that costs $680 isn’t sustainable?
