Dec 19th, 2022: Weekly Web3 Newsletter by Sujith Godavarthi

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Gm! Gm! It’s Monday!!! And I am back!!!

Now that SBF went to jail, I thought the story is over. Then comes John Ray, Gary Gensler, and Kevin O Leary… into the story. Even Donald Trump, Cathie Wood, CZ, etc.. but in other stories. Let’s get into it.

This Week in Web3

Do you know? ChatGPT is costing OpenAI (the company behind the tool) an estimated $3M a day to run.

1. FTX

SBF was finally arrested in the Bahamas (by the Bahamian Authorities)!! The charges included wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering. And he “could be looking at life in prison” if convicted.

  • There was some news that SBF and the inner circle had a Signal chat group called “Wirefraud”. Sam denies it, in his last tweet before getting arrested.
  • SBF kind of admitted that the entire thing was one big ponzi in a twitter space.
  • The US filed criminal charges against SBF.
  • FTX Japan has until March 2023 to cease operations.
  • SEC Chair Gary Gensler must testify before Congress to answer the “cost of his regulatory failures,” Representative Tom Emmer has said.
  • SBF says he is willing to accept house arrest if granted bail.
  • SBF’s application for bail has been denied in a Bahamas Magistrate Court on Dec. 13, with presiding Judge highlighting a “risk of flight”. He suffered from depression and insomnia, according to SBF’s attorney who is asking his client be let out on bail. SBF will be detained until at least February 8, 2023.
  • SBF is facing 8 charges, which could total up to 165 years in prison.
  • SBF’s parents received payments from FTX, according to new CEO John Ray.
  • Gary Gensler (Chairperson of SEC) knows that FTX was fraudulent from its inception?? He had more meetings with SBF than anyone in the space to discuss a crypto regulatory framework designed to benefit FTX alone.
  • “The loans that were given to Mr. Bankman-Fried were multiple. There’s no description of what the loans were for. In one instance he signed as both the issuer of the loan and the recipient fo the loan” – John Ray, the new CEO of FTX. Here is a thread on the FTX congressional hearing.
  • He will be remanded to The Bahamas Department of Corrections until his matter resumes on Feb 8, 2023.
  • Kevin O’Leary: Binance put FTX out of business on purpose. LMAO 😂
  • SBF’s lawyer suggested he’d pay $250,000 in bail money and wear an ankle bracelet instead of staying in a jail cell.
  • The company that was once valued at $32B used QuickBooks as its accounting software.
  • Alameda tried to redeem 3,000 wBTC days before bankruptcy, but failed the security verification process: BitGo CEO.
  • FTX requests permission to sell four of its businesses: FTX Europe, FTX Japan, LedgerX and Embed.

The end of SBF – FTX drama? Not yet..Let’s see what happens in the coming days.

2. Paxful says, go non-custodial

The founder of crypto exchange Paxful, Ray Youssef, mailed all the customers to go non-custodial. “You should not keep your savings on Paxful, or any exchange, and only keep what you trade here”.

And also the CEO and founder announced plans to remove Ethereum from the platform and said that the “revenue is nice but integrity trumps all.” The exchange has 11M users.

3. What’s Up Binance!!

Reuters has published an article titled “Exclusive-U.S. Justice Dept is split over charging Binance as crypto world falters – sources” which stated that Binance is under investigation for possible money laundering and criminal sanctions violations.

Binance saw this as a FUD and responded with a tweet stating: ‘Reuters has it wrong again. Now they’re attacking our incredible law enforcement team. A team that we’re incredibly proud of – they’ve made crypto more secure for all of us.’

Whatever, the only thing that matters is “All the funds are SAFU??”

Also, on Monday, Binance saw $902 million of net outflows (the difference between the value of assets arriving and leaving the exchange) in the past 24 hours, according to data by Nansen. From Dec 12 – Dec 14, Binance saw ~ $5B of outflows. IMO Binance passed the stress test that it’s customers has put.

Did I mention that CZ is also a believer in Inverse Cramer Effect just like us 😅??

4. Trump NFTs

Donald Trump is selling digital cards aka NFTs. These 45k tokens, minted on Polygon, cost $99 and can be purchased with $ETH or in fiat currency. All of them are sold out now and can be purchased on the secondary market (like OpenSea).

Trump made a $4.5M profit just like that, post-mint. As of now, it’s even more.Did Trump keep a giant portion of the most rare NFTs in his collection for himself??

No, it was for the cartoon pictures of Donald Trump. JK! I’m already broke.

5. BNB Chain 💥!!

When it comes to Blockchains with the highest TVL (Total Value Locked), BNB ranks second (Ethereum is first). But….

BNB’s protocol total value locked increased by 8.22% quarter-on-quarter, compared to Ethereum’s increase of 0.45% within the same period. Also,

  • BNB Chain was the most popular blockchain by number of transactions in Q3 2022.
  • Compared to Ethereum, BNB Chain managed to maintain an average of ~2x of Ethereum’s transactions count throughout the quarter.

6. Hey Coinbase

7. Market Overview

  • Bitcoin: -0.72%
  • Ethereum: -3.50%
  • Solana: -6.95%
  • Polygon: -9.55%
  • BNB: -10.62%

Quick Bites

  • Bitcoin balance on exchanges hit a 4 year low (2.3M $BTC).
  • Ethereum number of addresses holding 100+ ETH just hit a 21 month high.
  • Tron’s stable coin $USDD lost it’s peg and was trading at $0.97, (as of Tuesday).
  • Sartoshi, the anonymous creator of the mfers NFT project has mysteriously left Twitter in June 2022. He is to return on Jan 1st, 2023.
  • Microsoft bans cryptocurrency mining on cloud services. Users need to seek permission from now on.
  • On page 6 of the complaint against SBF, the CFTC declares ETH and Tether as commodities.
  • Canada banned crypto leverage and margin trading after FTX collapse.
  • Solana was chosen as the only official Web3 integration for discord’s Linked Roles launch. In the past month, Solana has partnered with Google, Stripe, and Discord.
  • Crypto portfolio software Cointracker suffers data hack. The hackers got access to user’s email addresses. Beware of phishing emails.
  • An ETF targeting metaverse tech developers in Europe is being launched by BlackRock.
  • Ava Labs (the company behind Avalanche) announced the release of Core Mobile, a mobile version of its flagship non-custodial multichain wallet.
  • Ledger hardware wallet adds a Defi tracking feature to the Ledger Live app where you can track performance analytics of various DeFi protocols.
  • The CPI report is in. It’s 7.1% (lower than expected 7.3%).
  • Soon US users will be able to buy ETH with PayPal on MetaMask in a few easy steps. You can also transfer your PayPal ETH balance to MetaMask!
  • Fed raises interest rates by 50bps.
  • Crypto exchange Gemini allegedly suffered data breach which resulted in a leak of 5.7 million emails.
  • Motorsport gaming developers ‘The Tiny Digital Factory’ have collaborated luxury car brand Aston Martin to release NFTs on Infinite Drive, the next-gen racing metaverse. 3,000 digital diecasts will be available for fans to buy, own and race from December 18, 2022. Yes, these are playable in the mobile racing game, Infinite Drive on iOS and Android.
  • TrustWallet integrated with THORChain to support in-app cross-chain swaps. Which means you can now swap Bitcoin via TrustWallet for coins like $ETH & $BNB without needing a centralised exchange.
  • Binance’s most watched cryptocurrencies: BTC, ETH, and, SHIB 👀.

Numbers Of The Week

100M

Privacy Protocol Aztec raises $100M.

69

Playboy is turning 69 this year and so they’re celebrating in the Sandbox metaverse.

6.9M

Lodestar Finance on Arbitrum was exploited for a possible loss of $6.9 million.

40k

On Dec 13th, the largest 24h flow of Bitcoin out of Binance ever happened. ~40k BTC

15M

Bitcoin Group is set to acquire German’s oldest bank for over $15M.

Interesting Tweets

The timeline of Ethereum NFTs. By @LeonidasNFT [Blockworks]

% increase in screen time is a huge indicator on how most of our meaningful interactions are digital and with more ways to monetize digital goods/services, NFTs will play a key role as accessible, fast + transparent way to earn for creators. [Jenil]

At the peak of the bull market last year,  @Uniswap had a ‘fees per core developer’ figure of ~$150M. At the moment, the figure is ~$10M. With the fee switch activated, ‘revenue per core developer’ could be ~10-15% of the above. [Token Terminal]

Weekly realized losses due to FTX fallout were lower than those for Terra LUNA crash, 3AC collapse – Chainalysis. [AMBCrypto]

Solana lost 97% of its developers – from 2,453 in January, there are now 75 left. The total number of active mainstream blockchain developers dropped from 3,700 to 1,600. Big yikes for $SOL. [NeKoz]

Interesting Reads

Do You Know?

Every five seconds, Bitcoin computes as any many cryptographic hashes as there are stars in the observable universe.

Meme Of The Week 😂

Disclaimer: None of this is financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and always do your own research.