Nov 21st, 2022: Weekly Web3 Newsletter by Sujith Godavarthi

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Gm! Just another devastating week in crypto? Well, that is what it looks like as the FTX drama unfolds and the contagion starts spreading.. And someone bought a bored ape for 0.1 ETH. How come I can’t find these deals 😕?

What’s Happening in Web3

Elon is still firing….

1. SBF, What Have You Not Done??

  • By publishing a tweet thread that says, “1)What H A P P E N E D…”, SBF was deleting his old tweets without them being captured by the CryptoDeleted bot
  • According to WSJ, Alameda inside-traded tokens that FTX would list.
  • The wallet that drained FTX accounts started swapping millions of DAI for Ether and is now the 36th largest holder of $ETH. Sam, is that you?
  • Temasek International (the investment firm owned by the Singapore government) to write down its entire $275 million FTX investment to $0.
  • VISA ends global Bitcoin and crypto cards partnership with FTX – Reuters
  • The lending unit of crypto investment bank Genesis Global Trading (they had $2.8 billion in total active loans as of the end of the third quarter of 2022) is temporarily suspended redemptions and new loan originations in the wake of FTX’s collapse. If Genesis falls, this could be bigger than FTX??? Genesis needs a $1 billion liquidity injection by Monday.
  • Genesis Global is the lending partner for interest-bearing Gemini Earn.
  • Crypto lending platform BlockFi is considering filing for Chapter 11 bankruptcy.
  • Vox interview: SBF tried to explain himself on what went wrong, why he had to fake himself and more…”It was never the attention. Sometimes life creeps up on you”.
  • “I think only a psychopath can write that tweet”: CZ (of Binance) calls SBF a psychopath.
  • “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here”: FTX’s new CEO John Ray on SBF.
  • John Ray submitted a 30-page document to the United States Bankruptcy Court for the District of Delaware. In his filing, Ray stated“In the Bahamas, I understand that corporate funds of the FTX group were used to purchase homes and other personal items for employees and advisors.”
  • $1.5M of Coachella NFTs are stuck on FTX.
  • Out of the $420.69M raised by FTX in 2021, $300M went to SBF’s pocket.
  • Multicoin Capital lost more than half its Crypto Fund’s capital this month (in about two weeks). They reportedly have (or had?) $863m of assets on FTX.And they expect that this fallout is gonna be worse. “many trading firms will be wiped out and shut down, which will put pressure on liquidity and volume throughout the crypto ecosystem. We have seen several announcements already on this front, but expect to see more.”– company letter.
  • Take a look at the balance sheet of crumbling FTX, visualized by @VisualCap
  • Between 25% and 40% of cryptocurrency-focused hedge funds had some level of direct exposure to FTX or the exchange’s native token, FTT, according to a new research note. An associated losses of well over $1 billion and possibly as much as $5 billion.
  • Celebrities who promoted FTX are facing a class action lawsuit for promoting unregistered securities. Tom Brady, Gisele Bundchen, Steph Curry and Larry David are among those named in the lawsuit.
  • FTX didn’t have an accountant or keep proper records of customer deposits.

Steady lads, deploying more contagion!! Track here.

2. Nike Launches Web3 Marketplace ­

This week Nike announced the official launch of .SWOOSH, a web3-enabled platform that will be a home for Nike virtual creations.

According to Nike, “.SWOOSH will allow Nike Members to learn about, collect and eventually help co-create virtual creations, which are typically interactive digital objects such as virtual shoes or jerseys.”

swoosh.nike

3. Adidas NFTs

Adidas unveils the genesis collection of their Virtual Gear. This is the beginning of phase 2 of their open metaverse journey (phase 1: ‘Into The Metaverse’ NFT collection was released last year ) called ‘Unbox The Impossible’. It is a limited-edition, 16-piece collection of the brand’s first installment of ‘Virtual Gear’.

And next week they will be releasing a ‘dressing tool,’ which will allow ‘Virtual Gear’ to be clothed on PFP NFTs from three partnering collections- BAYC, Mutant Ape Yacht Club, and Inhabitants.

Explore the wearables at adidas.com/metaverse

4. A Bitcoin A Day

keeps the doctor away?

El Salvador currently holds 2,381 BTC at an average buying price of $43,357. Thus, the country has spent nearly $103.23 million on its BTC purchase and the value of the same BTC currently sits at $39.4 million.

And now….they are DCAing (Dollar Cost Averaging) the BTC purchase. Nayib Bukele, the president of El Salvador made an announcement.

And Justin Sun, founder of Tron is to follow the same routine. Wake Up, Buy Bitcoin.

What now? The price is gonna go up or what?

5. Gary Gensler (of SEC) Linked To SBF?

Pro $XRP attorney John Deaton launches petition to investigate SEC Chair Gary Gensler’s connections with Sam Bankman-Fried.

Do you know? 6 months ago the SEC investigated FTX US on multiple matters. And they found no wrong doing. The SEC continued to meet with FTX on giving them a “no-action letter” to broaden reach in the US markets. We are talking about the guy who went after Kim Kardashian.

Also read the NYTimes article: Inside a Crypto Nemesis’ Campaign to Rein In the Industry

6. Market Numbers

  • As of Nov 15th, 192,340 $BTC ($3.2 billion) has been taken off exchanges in the last 7 days.
  • Data from on-chain analytics platform CryptoQuant shows that on Nov. 18, a giant tranche of almost 60,000 BTC entered Binance’s wallet.
  • In total, since Nov. 12, 2022, the users of centralized exchanges withdrew over 1.1 million Ether (ETH), or $1.3 billion in USD equivalent. Binance balances dropped by $2.3 billion, Gemini said farewell to $679 million, while the collapsed FTX lost $591 million.
  • As of Nov 20, $5.4 Billion of ETH has been withdrawn from exchanges this week.
  • As of Nov 15th: In the last 30 days, 106k BTC has been moved to self-custody.

Let’s have a look at some weekly performances:

  • Bitcoin: -6%
  • Ethereum: -10%
  • Polygon: -12%
  • Solana: -15%
  • BNB: -9%

Quick Bites

  • Firms offering consumers the ability to self-custody their crypto, like Ledger and Trezor, have seen an uptick in sales after FTX went bust.
  • “BTC will make it, but might be a long winter”: Elon Musk
  • zkSync raised $200M and now have a total of $458M in mission-driven funding.
  • Cristiano Ronaldo’s NFT collection was launched on November 18, exclusively on Binance.
  • “All of the recent collapses have been from centralized players and not from decentralized protocols”: JPMorgan
  • Serum, the FTX-developed token liquidity may have been compromised after the FTX hack and so the Solana developers are forking its code to create a new Serum for ecosystem apps.
  • The CEO of Coinbase, Brian Armstrong sold over $1.6M in Coinbase shares.
  • Tether, the issuer of the USDT stablecoin, said it was conducting a chain swap to move 1 billion USDT from Solana to Ethereum. The chain swap will reduce the total amount of circulating USDT on Solana, but the company said on Twitter that overall supply of the stablecoin will not change.
  • Input Output Global (IOG), the firm behind the Cardano blockchain, is releasing a new privacy-focused blockchain called Midnight and a token called dust to accompany the new network.
  • Solana’s total value locked has plunged almost 70% since Nov. 7, to $303M, and its token has lost a quarter of its value in the last seven days compared to a 7% slide in Ether. On the other note, Binance, OKX, and Bybit paused all Tether and USD coin deposits on the Solana blockchain. Is that because of FTX’s collapse and it’s relationship with Solana?
  • Apple job listings suggest the company is building a metaverse of its own for its long-rumored headset.
  • Co-founder and CEO of WENEW, Michael Figge, to join Yuga Labs as Chief Content Officer; Beeple, aka Mike Winkelmann, to join Yuga Labs as an advisor.
  • As of Nov 14th: In the past 2 weeks, the number of daily new accounts on
    PolkaDot ($DOT) rose nearly 10 times, while active accounts increased 4 times.
  • According to Glassnode’s latest analysis, Bitcoin’s transaction volume recently dropped to a 14-month low of $646M. The previous low of $649 million was noted on 21 October 2022.
  • Stably Corporation has issued USD-backed stablecoin on XRP Ledger which is the first XRPL-Based USD Stablecoin (USDS). It was launched with SEC-Qualified Custodian. Moreover, Ripple having a strong connection to financial institutions and low transaction fees will only help the coin adoption.

Numbers Of The Week

$20M

SolChicks NFT project lost up to $20m of treasury funds due to the UST implosion in May 2022 and decided not to inform the community.

$3B

FTX owes nearly 3 Billion US dollars to top 50 creditors.

$200k

Steve Jobs’ raggedy old sandals (worn by Steve Jobs during the early days of Apple) sold for $200,000 at an auction. Jobs’ sandals (and NFT) fetched $200k.

0.1 ETH

Bored Ape #5429 was purchased for 0.1 ETH

$32B 

As of Nov 14, trading volumes on decentralized exchanges(DEXs) hit a whopping $32 billion over the last seven days, according to data from Dune Analytics. All because of the FTX collapse.

Interesting Reads

Do You Know?

3 out of 4 investors lost money investing in Bitcoin, per the Bank for International Settlements (BIS) working paper.

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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