Crypto News Bites 2022/12/12
The Block secretly funded by SBF / CPI & FOMC on Tue & Wed / ETH Shanghai Upgrade Mar 23 / Starbucks launched NFT loyalty program / Lodestar $6.5m hack
Top News Summaries
Tue CPI Wed FOMC. ETH Shanghai Upgrade Mar 2023, allows unstaking. FTT +45%, TON +18%. Argos suspended, may file for bankruptcy.
Crypto news site The Block was secretly funded by SBF. Amber Group laying off 40%, allegedly owes $130m. Exchange Digital Surge enters voluntary administration. Lodestar exploited for $6.5m.
Starbucks officially launched NFT rewards program Odyssey. NFT creator royalty enforcement tools by OpenSea & Metaplex.
Crypto.com releases Proof of Reserves.
More details, news and analysis below! Also follow me on Twitter!
Market Overview
Another rangebound weekend for crypto markets as BTC was stuck around 17050-17350 and ETH around 1250-1295 on a lack of major news. The stock market was also quiet as markets wait for macro data. Tuesday’s US CPI is the last data point before FOMC rate hike decision on Wednesday. Market is pricing in a 74% chance of a 50bps hike after four consecutive 75bps hikes. More focus will be on how hawkish Fed Chairman Powell’s tone will be, as markets are split on whether February’s FOMC will be a 25bps or 50bps hike.
Interesting correlation analysis. China’s 10 year yield shows high correlation with BTC. Correlation is not causation, as many would point to this being just another global fiat liquidity signal. Highlighting here as it simply shows a cleaner look, since don’t traders want a clean signal?
Ethereum developers target March 2023 for the next upgrade called Shanghai. One feature would allow users to withdraw their ETH from staking, or locking ETH for rewards. Since staking began in Dec 2020, all stakers have not been able to unstake, and perhaps some selling pressure will occur.
On Friday, bankrupt exchange FTX’s token FTT jumped as much as 45% as founder SBF supports a crypto influencer’s proposal to revive the exchange. The proposal was for all fees to be accrued to holders of a new FTT token distributed to creditors/depositors. The issue, of course, is fraud and lack of trust. FTT drops but is still +17% from start of Friday.
Telegram’s token TON spiked up 18% during early Asia hours on Monday, making a new half year high. Earlier Telegram announced that they launched Fragment, a decentralized marketplace allowing users to trade Telegram usernames. Last week, Telegram also allowed no SIM sign up. So far the most expensive username sold went for 944k TON or around $1.88m.
Shares of BTC miner Argo Blockchain ARBK 0.00%↑ has suspended trading in the UK & US. The company may have accidentally reveals plans for bankruptcy, according to an accidental announcement. Just another data point showing the difficulty BTC miners face during crypto winter, and I expect the industry to consolidate further.
US listed crypto exchange Coinbase COIN 0.00%↑ asks users to switch USDT stablecoin to USDC stableoin , and is waiving conversion fees in a new campaign highlighting the quality of reserves that back Circle-owned USDC. Coinbase by the way is a co-founder of USDC. Binance back in Sept auto-converts USDC to their own stablecoin BUSD, as fiat yield is meaningful and a great source of income for stablecoin issuers. USDC’s market cap has dropped from $56b to $42.8b so we shall see if Coinbase’s latest attempt will reverse this trend.
NFTs
Some marketplaces over the past few months have made NFT creator royalties, which are the fees the creator receives for every secondary sale of an NFT, optional. OpenSea created an Operator Filter Registry, an on-chain creator royalty enforcement tool which blocks sales of NFTs that do not pay the creator royalties. The ownership will be transferred to the Creators Ownership Institute by 2 Jan 2023 to be decentralized.
Metaplex, a platform helping creators launch NFTs on the Solana blockchain, to release a new standard similar to OpenSea’s solution for enforcing NFT creator royalties. However Metaplex has control over the token metadata, allowing them to potentially change the NFT image. Imagine waking up one day to see your Gyoza NFT changed to a French fry NFT. The horror. We shall see how this resolves, but a big concern which may pressure Solana NFTs even more.
Starbucks officially launches their Odyssey NFT rewards program partnering with Forum3, which combines its existing loyalty rewards with NFTs based on the Polygon MATIC blockchain. Demand for the platform so far has been “unprecedented.”
Follow the Money
Forum3, a digital collectible and crypto advisory company that collaborated with Starbucks for their Odyssey NFT loyalty program, raises $10m in seed round.
Outdefine, a decentralized hiring network, raises $2.5m in seed round.
Balthazar, a web3 gaming infrastructure company, raises $2m private round token sale at a $60m valuation. Their SDK allows other developers’ games to seamlessly provide a non-custodial crypto wallet to their users without them even knowing they are playing a blockchain game. My views on the next wave of crypto adoption is that users will not need to understand blockchain technology, just like how most people use the internet without understanding TCP/IP.
A class action lawsuit was filed against celebrity promoters of Yuga Labs’ NFT collections such as Bored Ape Yacht Club (BAYC), listing dozens of celebrities such as Justin Beiber, Paris Hilton, Jimmy Fallon and Madonna among others. On the other hand, another class action lawsuit filed last month against celebrity promoters of crypto exchange FTX has been quietly dropped.
Other News
Crypto news site Coindesk allows readers to earn DESK tokens from reading news articles, watching videos or other interactions on their website. Read-To-Earn?
Arthur Hayes, co-founder of BitMex, pens another article arguing that BTC has bottomed as market has capitulated with the collapse of leverage. A master wordsmith as always, a highly entertaining read.
Crypto.com releases Proof of Reserves audited results by auditor Mazars, with the nine tokens mentioned showing over 100% reserve ratio. Proof of Reserves, while shedding some light into the opaqueness of a centralized exchange (CEX), have shortcomings. Although better than nothing, I still recommend learning to self-Custody your own crypto.
Dark Side of Crypto
Skeletons continue to come out of the closet. Crypto news site The Block had been secretly funded by FTX founder SBF. The Block’s CEO had taken three loans from SBF since 2021 to fund the buyout of the firm from investors aiming to make the firm 100% employee owned. This severely undermines the credibility of The Block, although it seems that nobody but the CEO knew of the loan, who promptly resigned.
Crypto trading firm FalconX has 18% assets stuck on FTX. The firm is still well capitalized.
Amber Group, as mentioned last week, had started laying off staff. They are laying of 40% of staff, have terminated a $25m sponsorship deal with football club Chelsea FC. The company supposedly owes crypto lender Vauld’s CEO $130m, but the firm says they will issue an official statement regarding false allegations shortly. I would take any crypto off any centralized finance (cefi) until the smoke clears.
Australian crypto broker Digital Surge, who suspended withdrawals due to exposure to FTX, entered voluntary administration which is similar to Chapter 11 bankruptcy.
Lodestar Finance, a decentralized finance (defi) lending platform on Ethereum layer 2 solution Arbitrum, was exploited and $6.5m was drained. $2.4m can be recovered, and Lodestar is attempting to negotiate with the exploiter.
Bankruptcy of 2nd largest crypto exchange FTX causes contagion risks. How many funds & protocols have yet to announce their exposure? Learn to self-Custody!
Decentralization no longer just a tagline. Centralized to decentralized movement for remaining crypto traders & investors.
Global crypto adoption and increased regulation, launches of Centralized Bank Digital Currencies.
Bitcoin mining industry consolidation as margin squeezed on lower BTC prices and higher costs (electricity, funding, hashrate difficulty etc).
Macro: US CPI peaking & potential slowing of Fed rate hikes / Russia Ukraine war may be thawing / China pivoting from zero-Covid policy
Tokens Mentioned Today
BTC ETH FTT TON MATIC
Josun