Jan 12th, 2023: Weekly Web3 Newsletter by Sujith Godavarthi

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Gm! And happy new year!!! Long time, no see. I missed you guys!! Anyways, I made it up for the last 2-3 weeks (and sorry for making this newsletter really longgggg).

And…you’ll see me every Thursday (not Monday!) from the next issue…

Talking about web3, 2022 has its up and downs (more downs actually)….

But DeFi won. The technology won. The adoption didn’t. The use cases are not much. Or should I say… “Not Yet”. Rome isn’t built in a day. It takes a week, to understand what Blockchain and Bitcoin are.. So…it’s ok. We will get there. Sooner or later.

What’s Happening in Web3

Meta market cap in Jan 2022 is $0.93T. In Jan 2023, it’s $0.34T. Just saying.

1. FTX

SBF is a free man now 😥

  • US government launches an investigation into the $372 million hack following FTX bankruptcy.
  • The FTX Japan team is gradually developing systems that will allow customers to withdraw and store their assets on both the FTX Japan and Liquid Japan websites. The users will most likely be able to start withdrawing funds from February.
  • Alameda wallets are currently swapping shitcoins for BTC. Just a few days after SBF arrived back home.
  • SBF borrowed $546M from Alameda to buy Robinhood shares.
  • SBF pleads not guilty to US criminal charges.
  • Sam Bankman-Fried reportedly cashes out $684,000 while under house arrest.
  • Bahamas Securities Commission says it’s holding FTX deposits worth over $3.5 billion.
  • FTX spent $7M on food in 9 months. And a total of $40M on hotels, flights, and food.
  • The US government seized SBF’s $455M Robinhood shares.
  • FTX’s former Director of Engineering Nishad Singh might soon cooperate with federal prosecutors.
  • Remember when SBF pledged to giveaway a lot of money (aka customer funds)?? Now FTX management is trying to recover all those funds.
  • FTX has recovered over $5B in cash & crypto.

It’s 2023 and Tornado Cash developer Alexey Pertsev is still in jail.

2. Rolls-Royce NFTs

Rolls-Royce unveiled its NFT collection at an exclusive event in Dubai.

The luxury car manufacturer launched six one-of-one Phantom Extended Series II motor cars that come along with a one-of-a-kind NFT, in collaboration with globally renowned British artist Sacha Jafri.

100% of the resale royalties of NFTs that comes with the Rolls-Royce X Sacha Jafri’s The Six Elements collection go to selected charities.

3. There Is No Second Best!!

MicroStrategy bought 2500 more Bitcoin for $41M. They now hold 132,500 $BTC worth over $2.1 BILLION. That means they own 1 out of every 159 Bitcoin that will ever exist. And also they are planning to launch applications and solutions for Bitcoin lightning network in 2023.

An easy 2023 prediction: MicroStrategy will buy more Bitcoin.

4. Trump NFTs Lost Momentum

In 2 weeks of its release, Donald Trump’s NFT collection value declines 80% in 14 Days. The floor price of the collection has dropped to 0.19 ETH from a peak of 0.84 ETH in less than two weeks. But there is another way to look at it. 0.083 ETH was the mint price and the current floor price is more than that. So…

Anyways, does it matter to Trump? He already made over $4.5 million in sales volume! And also he claimed that these JPEGs (made out of stolen stock images) are more about art.

Update: The sales volume down 99% from December peak. Just as expected!

BTW have you seen this? Looking at “Trump Cards”; Donald Trump’s NFT Collection (Joe Rogan Podcast).

5. Bitcoin and Ether did well in 2022

Overall, 2022 is not a good year for crypto investors. I think the majority of us will agree with the point, especially after the 2021 bull run when the tokens went up forever in that phase and almost no one took a profit.

Anyways, according to this Coindesk chart, Bitcoin and Ether did pretty well from an investor’s perspective when compared with S&P 500, NASDAQ, and Bloomberg Us Agg.

When it comes to Bitcoin vs Ethereum, Ethereum outperformed Bitcoin in terms of total transaction volume with a 338% surge. But Bitcoin is still the most popular crypto, all thanks to the online search interest the asset has.

6. Cold Wallet Hacked.. WTF!!!

Remember the crypto ethos “Not Your Keys, Not Your Coins”? Well, the keys of Luke Dashjr, a Bitcoin Core Developer got compromised and he lost 200+ Bitcoins. Luke explained how his server got hacked here.

Imagine if a core developer’s wallet keys got compromised, what chance does a normal user have in keeping his/her assets safe? Or am I reacting a lot and it’s no big deal??

7. Scams, Hacks, and Ponzis…

A total of 303 blockchain security incidents happened in 2022, a 28.3% increase from 2021. With a total loss of $3.77 billion freaking dollars, DeFi accounted for $2.075 B.

December saw $62.2 million worth of cryptocurrencies stolen, and it was the “lowest monthly figure” of the year, according to CertiK.

Image Source: The Token Dispatch

8. Market Overview

2023 started off on a good note. The market is back in the green. For reference, Solana hit the $15 mark after trading below $10 (for the first time in 2 years) for a few days. The TVL dropped by 98% and the price of $SOL went down 94% from an all-time high.

The tokens that are mooning: $LDO (Lido), $FET (Fetch.ai), and $BONK (Bonk). Don’t ask me why they are mooning.

And when it comes to weekly performances, here is how these assets performed:

  • Ethereum: +12.32%
  • Bitcoin: +8.44%
  • Solana: +22.77%
  • Polygon: +11.73%
  • Binance Coin: +11.74%

9. Huobi Exchange In Trouble?

  • On Jan 6th, $60 million left the exchange.
  • Huobi Korea is planning to split from Huobi and change its name.
  • Justin Sun’s USDD stablecoin still hasn’t regained its peg.

Not sure about the situation, but I see a lot of red flags. Better safe than sorry!

Quick Bites

  • The World Bank is cutting its 2023 forecasts and warning of a global recession.
  • As per McKinsey & Company analysis, the metaverse has the potential to create $5T in value by 2030.
  • The New York State Department of Financial Services (NYSDF) revealed that Coinbase will pay a $50-million fine in response to violations of New York’s financial services and banking laws, as well as invest $50 million to correct its compliance program.
  • Update on Solana: The new year looks better, and also the Daily Active Wallets 3x Pre FTX levels (reaching 120,000 users) – because of meme token $BONK???
  • Fidelity (the firm with A few Trillion AUM: Assets Under Management) has filed a trademark application for Cryptocurrency Trading and NFT Marketplace.
  • The brother of a former Coinbase product manager has been sentenced to 10 months’ prison after earning almost $900,000 in a crypto insider trading scheme.
  • AR Rahman is launching a metaverse platform ‘Katraar’ for artists.
  • The founder of NFT project ‘Mutant Ape Planet’ has been arrested and charged for $2.9M rug pull.
  • Italian lawmakers approve 26% capital gains tax on crypto.
  • Samsung has started the year by investing over $35 million in Latin America-focused metaverse initiatives.
  • Ripple might be creating a National Stablecoin for the Republic of Palau.
  • Binance users can now purchase crypto using Apple Pay & Google Pay.
  • Grayscale holds 635k BTC and if it goes bankrupt, the price of Bitcoin will be impacted heavily.
  • Over 2.2 million ENS names were registered in 2022.
  • Gemini’s Winklevoss twins demands removal of DCG CEO Barry Silbert in an open letter. And also Gemini terminated its crypto yield product.
  • Coinbase to fire 950 employees to lower operating expenses.
  • E.T. memorabilia sold for $2.56M at a Hollywood-themed auction, Julien’s Auctions.
  • Ferrari ended its crypto sponsorship and suffered a loss of $30M as a result.
  • No. of wallets with balance over 0.01 BTC is at 11.4 million, while in ETH, there are 22.8 million addresses holding over 0.01 ETH.
  • 57% of all ETH staked is being handled by just 4 staking providers: Lido Finance, Coinbase, Binance, and, Kraken: Delphi Digital.
  • Grayscale removes AVAX token from their portfolio.
  • RTFKT COO falls victim to an NFT Phishing attack.
  • Kraken will leave the Japanese market at the end of January 2023.
  • China is set to launch its first regulated NFT platform on Jan 1st, 2023.
  • Binance serves over 120 million users globally, says CZ.
  • 3AC Founders Su Zhu and Kyle Davies were subpoenaed on Twitter on 5 January, with the execs ordered to provide all documents in their possession or control.
  • SuperRare Labs, the company behind NFT marketplace SuperRare is laying off a whopping 30% of its staff.
  • BMW to use BNB Chain for their blockchain loyalty program.
  • The Dog that inspired $DOGE meme is ill with leukemia.
  • Bitcoin had 4 red quarters in a row for the first time ever. Crypto 2022 is just another level!
  • Mango Market hacker Avraham “Avi” Eisenberg was arrested in Puerto Rico and charged with market manipulation offenses.
  • Nomad exploit wallet address transfers $1.5M to Tornado Cash.
  • By the end of Feb 2023 Ethereum devs to release the public testnet for the Shanghai upgrade.
  • Jack Dorsey (the guy who left his full-time job to work in crypto) is working on integrating Bitcoin’s Lightning into Square POS terminals.
  • Binance gains court approval to acquire bankrupt crypto lender Voyager Digital. Finally, they did FTX couldn’t do.
  • Mt. Gox first repayments pushed back to September.
  • The number of addresses containing more than 10 Ethereum has reached an all-time high.
  • It’s been 14 years since Satoshi Nakamoto released Bitcoin v0.1. And also been 14 years since Hal Finney started running Bitcoin. 

Interesting Tweets

Spend $0 to learn about Ethereum development. [Priyanshi Raval]

$LUNA, $SOL and $AVAX were hailed as the golden trio during the bull run. At one point they were all sitting at $100 simultaneously. 9 months later: $LUNA is at 0. $SOL is below $10. And $AVAX isn’t far behind..[Miles Deutscher]

Well hello new #BTC yearly candle. 2022 closed down 64.22%. [Benjamin Cowen]

Some smart people tell me there is an earnest smart developer community in Solana, and now that the awful opportunistic money people have been washed out, the chain has a bright future.Hard for me to tell from outside, but I hope the community gets its fair chance to thrive. [Vitalik.eth]

Average daily transactions over the last month:

1. Polygon = 3.0M
2. BNB Chain = 2.8M
3. Etheruem = 1.0M
4. Optimism = 520K
5. Arbitrum = 507K

[Narb]

Crypto market is fascinating. Only here you will find – Agency owners with no clients. Crypto gurus with no money. Event planners who never leave home. It will get better with time. Maybe once the bull run starts. [Vaibhav Gupta]

JUST IN: 🇺🇸 Judge rules that Celsius users gave up legal rights to their BTC by using the platform and all the $4.2 billion of crypto deposits are now property of Celsius. Take your #bitcoin off exchanges! [Bitcoin Magazines]

The flippening no one is talking about 👀. Optimism overtakes Arbitrum for Daily Active Addresses and Transactions per day. Very interesting. [Wesite]

Interesting Numbers

3.7B

A record $3.7B was stolen in crypto hacks in 2022, most of which came from DeFi.

70%

Crypto takes up 70% of online investment scams in Hong Kong.

3.8B

Indians moved over $3.8B to foreign exchanges since crypto tax rules.

26%

The 7-day volume of NFT sales in the first week of 2023 displays an uptick of 26%.

70%

70% of Invested Venture Capital into Crypto Sector in November and December Went to CeFi and Infrastructure Companies. And 49% of VC Dollars Went Towards DeFi, Scaling Solutions, and Alt-L1s Last Year.

58%

report suggests wash trades accounted for 58% of NFT Volume on Ethereum Blockchain in 2022.

40%

Blue-chip NFT Index down by <40% in 2022, according to NFTGo.

Interesting Reads

Do You Know?

Binance’s market share of BTC trading volume rose to 92% by end of 2022. It was only 45% when the year began.

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. ­

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