Maker Minds #9 — Pay in Dogecoin on Uber Eats — FTX and Binance in great shape — 80% of Ethereum stakers at loss
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The destruction of crypto value during the current down cycle has been staggering for an industry that seemed to be operating at full capacity just last year.
The market cap of all cryptocurrencies is $850 billion. As of November 2021, it was $3 trillion. That's a cumulative decline of 70% since that peak!
The crypto market is now suffering from a credit crisis. This has highlighted the fragility of the credit and leverage system in crypto, increasingly compared to the Wall Street crash in 2008.
It all started with the collapse of TerraUST, which then infected several other crypto protocols and companies in a domino effect. It is now becoming clear how many centralized crypto lenders were offering unsustainable returns.
Three Arrows Capital was put into liquidation by a court in the British Virgin Islands after failing to pay its debts. The central bank of Singapore, where 3AC was previously headquartered, later said the fund had deliberately misrepresented its balance sheets and had exceeded permitted assets under management for several months.
The collateral damage of 3AC's implosion has spilled over to other cryptocurrency companies, namely Voyager Digital and BlockFi.
Crypto companies suffering from this crisis have multiplied and are now looking to restructure their finances or find a lifeline from their better capitalized peers.
SBF's Alameda Ventures, for example, stepped in with a $500 million loan to save Voyager, of which $75 million has already been used. Shares of $VOYG have fallen about 60% in the last two weeks after the announcement of its exposure to 3AC.
As for BlockFi, its major problem lies in a $1 billion over-collateralized loan to 3AC, which was liquidated early in the debacle. BlockFi reported an $80 million loss during the events of last month. It now has a $400 million credit line through FTX that has not yet been drawn upon.
Binance is keeping a low profile, but behind the scenes is negotiating more than 50 rescue and buyout deals. FTX and Binance, which have become extremely profitable and managed their cash flow taking into account the hypothesis of a collapse of the crypto market, will continue to consolidate their place and are probably the big winners of this bear market.
💰 Crypto
🔘 El Salvador buys back 80 $BTC for $15 million.
🔘 Three Arrows Capital: a court in the British Virgin Islands orders the liquidation of the fund.
🔘 FTX, Deribit and BitMEX liquidated positions held by Three Arrows Capital after the hedge fund failed to meet margin calls.
🔘 Voyager Digital signed with Alameda Research for a revolving credit line to protect client assets in light of market volatility. In doing so, Voyager added more than $200 million to its balance sheet.
🔘 80% of Ethereum stakers are at loss. For context, staking ethers on the Beacon chain went public when an ether was trading at about $600 in December 2020. Since then, the ether has been able to break the $4,000 mark and even hit an all-time high of $4,800. According to the chart, this means that the majority of current stakers locked in their $ETH when it was trading between $2500 and $3500.
🔘 Samsung has launched a competitor to Apple Wallet called Samsung Wallet. This one allows users to store their bank cards, digital keys and credentials. Users will also be able to keep track of their digital asset wallets through an integration with Samsung Blockchain Wallet.
🔘 Coinbase is facing a lawsuit related to its promotion of the stablecoin TerraUSD ($UST). The lawsuit claims that Coinbase deceived investors into believing they were buying a "reserve-backed stablecoin." However, TerraUSD is not backed by US dollars.
🔘 The SEC has reportedly launched an investigation into how crypto exchanges protect themselves from insider trading.
🔘 A Dogecoin investor is suing Elon Musk, Tesla, and SpaceX, claiming that their actions with $DOGE constituted a ponzi scheme. The suit seeks treble damages, or $86 billion, which is the amount Dogecoin investors have allegedly lost since Musk started talking about it on Twitter.
🔘 Phantom and Metamask fixed a major vulnerability that sometimes caused users' seed phrases to be stored on their hard drives.
🔘 MetaMask and Infura now incorporate ZK-rollup technology through a partnership with StarkWare.
🔘 FBI warns of an increase in cryptocurrency scams on LinkedIn.
🔘 FTX acquires Canadian cryptocurrency platform Bitvo.
🔘 Harmony blockchain's Horizon bridge suffered a $100 million exploit, reportedly by North Korean hackers from Lazarus Group. These are the same people who attacked Axie Infinity's Ronin bridge in March.
🔘 Proof of Stake blockchain node provider Ankr was the victim of a hack this Friday, July 1. The RPC ("Remote Procedure Call") gateways provided by the company to access the Polygon and Fantom networks were hijacked in order to extract funds from its customers.
🔘 On June 29, Arbitrum Odyssey was paused by Offchain Labs to alleviate congestion and high gas charges on the network. Arbitrum Odyssey was a user acquisition event launched on June 21. Fees on Arbitrum, which were supposed to be significantly lower than Ethereum, ended up exceeding Ethereum's fees following the success of the program.
🔘 Uber Eats will now allow users to pay for their meals with Shiba Inu, Dogecoin, Ethereum, Litecoin and other cryptos via BitPay.
👩🏻🎤 NFTs & Metaverse
🔘 NFT trading volumes continue to hover around their annual lows. There was a slight pickup in OpenSea volumes ($118 million last week vs. $93 million the week before), but overall, nothing out of the ordinary. Note that the above chart does not exclude wash trading at 0% royalties (for the purpose of trading tokens), which still occurs to a large extent on the X2Y2 and LooksRare platforms.
🔘 The OpenSea platform reveals that the email addresses of its users have been leaked.
🔘 Footballer Kylian Mbappé joins blockchain game Sorare as an ambassador and investor. Recently, Cristiano Ronaldo and Binance announced to be in partnership to promote NFTs. Here's a list of some high-profile athletes associated with crypto projects:
Stephen Curry and FTX
LeBron James and Crypto.com
Messi and Socios
Tom Brady and FTX
🔘 Axie Infinity: the Ronin ($RON) bridge available again after several months of suspension.
🔘 Olympia is launching membership cards in the form of NFTs. To set up this collection of NFTs, the Parisian concert hall partnered with marketplace Tailor, which was responsible for developing the technological part of the project.
🔘 Meta partners with Balenciaga, Prada and Thom Browne to launch a digital fashion marketplace where designers can design and sell NFTs.
🔘 After getting bought out last month by private equity firm Hivemind and blockchain company Algorand, in particular to reorient itself towards web3, Napster is publishing its litepaper. For the occasion, the platform announces the release of its own token in order to bring together music creators and their fans.
🔘 P2E platform Merit Circle will pay $1.75 million to Yield Guild Games as a settlement after Merit Circle's DAO voted to remove YGG from the investor list. Originally, the DAO had voted to refund YGG's base cost, but Merit Circle decided to refund ten times YGG's initial investment to protect both parties from future litigation.
🔘 Christie's NFT manager Noah Davis is joining Yuga Labs as brand manager for the CryptoPunks collection. Yuga Labs also said it will be setting up official intellectual property rights for CryptoPunks owners in the coming weeks.
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