🧑‍🤝‍🧑 *If the dollar had a twin who grew up in blockchain country, and spoke fluent crypto…*

[Stablecoins](https://learn.robinhood.com/articles/1thUPqVffWfMYJvxthNrHn/what-is-a-cryptocurrency/#What_are_stablecoins) are a type of cryptocurrency pegged to real-world assets, like the USD. They let people transact on the blockchain while avoiding crypto’s infamous price swings. Some stablecoins are fully reserved, meaning they're 100% backed by cash or cash equivalents. Algorithmic stablecoins, on the other hand, are typically *not* fully backed, and what backing they do have is usually crypto.

 DEFI(NE)

Ian Redman

Heard on the Block: “stablecoin”

__Extra Biscoff cookies for everyone…__ Yesterday __[Delta](https://robinhood.com/stocks/DAL/)__ agreed to [boost](https://www.cnbc.com/2022/12/03/delta-pilots-would-get-more-than-30percent-in-pay-raises-under-new-contract-deal.html) its pilots’ pay by at least 31% in a $7B+ deal that could end years of contract-negotiation clashes. In October, Delta pilots voted to strike if their union and the airline couldn’t reach an acceptable pay agreement. If the salary boost is approved, it’d be the first new pilots’ contract at a big airline since the pandemic began.

- __New terms:__ Delta pilots would receive an 18% pay bump as soon as the contract is signed, with the rest paid over the next three years.
- __New horizons:__ If the deal is OK’d, it could become the industry standard for contracts negotiated at rivals like __[American](https://robinhood.com/stocks/AAL/)__, __[United](https://robinhood.com/stocks/UAL/)__, and __[Southwest](https://robinhood.com/stocks/LUV/)__. Meanwhile, travelers may end up paying higher fares for longer.

__Failure to launch…__ US travel is booming again, but pilots have been in short supply after thousands retired during the pandemic. As the industry returns to profitability and daily life gets pricier, pilots want higher comp. But negotiations have been turbulent: last month American Airlines pilots rejected a 19% pay-hike proposal, saying it wasn’t enough. In September, pilots from United, __[JetBlue](https://robinhood.com/stocks/JBLU/)__, __[Spirit](https://robinhood.com/stocks/SAVE/)__, Delta, and other airlines picketed at major airports for better pay and more reliable schedules.

Delta’s jumbo pay day (Michael M. Santiago/Getty Images)

Land

__Higher pay could carry higher risks…__ Labor costs and fuel are airlines’ two biggest expenses, and most carriers’ costs have ballooned since the pandemic started. Locking in multiyear pay hikes could help keep pilots happy, but could have consequences for airlines if travel demand sinks again in 2023 or ’24, especially with a recession expected on the horizon.

Delta agrees to multiyear raises for pilots, pressuring its rivals — and future profits

__SPAC to square one…__ Yesterday __[USDC](https://robinhood.com/crypto/USDC/)__ stablecoin issuer __Circle__ said it was [bailing](https://fortune.com/crypto/2022/12/05/circle-pulls-the-plug-on-spac-as-stablecoin-giant-returns-to-profitability/) on plans to go public on the NYSE by merging with a special purpose acquisition company, aka SPAC. Circle is well known in crypto circles: its main stablecoin, USDC, tracks the US dollar (1 USDC = $1), and the company says it’s 100% backed by cash and US Treasuries. It’s the second-largest stablecoin by market cap (after __[Tether](https://robinhood.com/crypto/USDT/)__) with $43B in circulation. But now Circle’s walking back from its SPAC merger, possibly because it failed to receive the required SEC sign-off. 

__In love and crypto…__ timing’s everything. Circle first announced its SPAC plan last year when crypto was booming. Earlier this year, the merger could’ve valued Circle at up to $9B and made it one of the few publicly traded crypto companies. But times have changed:

- __TerraUSD,__ an algorithm stablecoin, blew up in May (unlike “fully reserved” USDC, it wasn’t backed by cash), and crypto prices have plunged further since FTX’s collapse.
- __While Circle said__ it had minimal financial exposure to __FTX__, the SEC might be hesitant to approve crypto-related deals as it sifts through the bankrupt exchange's wreckage.

SPACKED

__Contagion might not spare the strong…__ Circle's decision to scrap its public debut reflects the radically changed environment it now finds itself in. Some have asked whether the SEC could’ve done more to [prevent](https://www.theblock.co/post/189351/sec-facing-rising-scrutiny-after-ftxs-epic-implosion) FTX's loss of billions in customer funds, and officials are [pressuring](https://snacks.robinhood.com/newsletters/7L5hvnVgBnXhNL03JnlDFZ/articles/5KUvBxRDX4pvt3ukesQuac/) for stricter regulation. That a profitable, regulated, US-based company chose to walk back its billion-dollar debut shows just how far [contagion](https://snacks.robinhood.com/newsletters/5oS3vfl3q3m34Ud64MuTOf/articles/6GVY28qbI5kcW4Y5gvzbIM/) has apparently spread.

Circle's SPAC strategy fizzles as regulators and lawmakers sour on crypto

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