Sushi, Decentralization & Whale Games
Daily Bullets: Tuesday, December 20th
Is decentralization really a thing in crypto? The concept and fundamental tenets of DAOs and decentralized governance sounds nice in theory but when you get down to it, a few large entities with overwhelming resources inevitably gain a majority control and are therefore able to dictate policy and influence governance in their favor. We’ve seen these types of whale games time and time again now. SushiDAO successfully voted to direct all fees generated by SushiSwap to the protocol’s treasury instead of Sushi token holders in a recent controversial move that had community members questioning the proposed budget. When all was said and done, it was thanks to two large entities - GoldenChain, the digital investment arm of Golden Tree, and a wallet tied to crypto trading firm Cumberland that the proposal was able to be passed.
Five large entities controlled 88.5% of all votes, both for and against, which means the remaining 774 wallets that participated essentially had no say. Of course, it’s important to note that SushiSwap has been unsustainable for some time and claims to need the funding from this move to improve its long-term plan for sustainability - so actively working to fix a failing protocol isn’t itself a bad move. However we can only maintain the farce that governance in crypto is decentralized for so long when we routinely see governance power centralized among a few entities.
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Daily Bullets:
Visa proposes that StarkNet may help bridge the gap between crypto and the real world
Bankrupt BlockFi filed a motion requesting authority to allow its users to withdraw digital assets
FTX will try to clawback millions of dollars in donations to US politicians
Sushi governance vote to direct all fees to the protocol’s treasury passed thanks to a few whales
Binance joining the Chamber of Digital Commerce executive committee, a U.S. lobby group
Chinese Zhejiang Province aims to build a $28.7B metaverse industry by 2025
Polygon co-founder launched Beacon, a web3 startup accelerator for the next 100 web3 unicorns
Polygon partnered with Hi to work on web3-focused debit cards
Uniswap-MoonPay deal allows buying digital assets via a bank or supported credit or debit card
Mercedes Benz filed trademark applications related to NFTs and virtual goods
Data:
TL;DR: SushiDAO successfully voted to direct fees for the next year to the protocol’s treasury. Looking at their treasury and fees collected, we can see that both have dwindled to almost nothing. At its peak in April 2021, Sushi had a treasury worth $1.2B and was bringing in millions of dollars of fees per day but the treasury has most recently been worth only ~ $15M-$20M and fees in the range of only tens of thousands of dollars per day. Now they’ve gained a $5M annual budget to change things around.
OKX just listed BNB token and there were some recent rumors that Elon Musk followed them on Twitter while he doesn’t even follow Binance (who contributed $500M to his Twitter acquisition). So let’s look at some of their stats: ranked 3rd in volume according to Coingecko only behind Binance and Coinbase. Defillama has their reserves at $6.3B, just slightly behind Bitfinex and above Huobi, Crypto.com, Kucoin and Bybit. Exchanges rise and fall, will OKX be among the survivors?
SushiDAO Fees vs Treasury:
CEX Rankings:
OKX Reserves:
Now for a more expanded and detailed look at the day for those who likes details and sources:
Crypto News:
a16z still holds 95% of everything it’s bought across its multi-billion dollar crypto funds and still have billions to deploy
Visa wrote a proposal that StarkNet may help bridge the gap between crypto and the real world by outlining a way for users to automatically send payments using the self-custodial wallet without having to sign each transaction using account abstraction
Bankrupt crypto lending platform BlockFi filed a motion requesting authority from a United States bankruptcy court to allow its users to withdraw digital assets currently locked up in BlockFi wallets
Polygon co-founder Sandeep Nailwal launched Beacon, a web3 startup accelerator that aims to create the next 100 web3 unicorns and offers a 12-week program to mentor and finance startup founders. Fifteen startups have already received funding to be announced in January
Fortnite creator Epic Games will pay $520M in FTC settlements regarding allegations over deceptive practices regarding in-game purchases and protecting young players privacy. Epic Games has increasingly positioned itself as a key builder of the metaverse
Modulo Capital, a relatively unknown firm founded by three former Jane Street traders, received a $400M loan from Alameda Research
Bitcoin mining firm Greenidge Generation came to an agreement with its lender NYDIG about restructuring $74.7M of debt, though a bankruptcy is still on the cards
Market making firm Auros filed to begin bankruptcy proceedings in the British Virgin Islands after approximately $20M of company assets became frozen on FTX
CoinShares listed on the Nasdaq Stockholm exchange
Economic/Government/Regulatory:
The Central African Republic (CAR) won’t list its sango crypto coin until next year due to “current market conditions” and seasonal factors such as the holiday season
Kazakhstan legislators approved a bill last week that will introduce corporate tax for bitcoin miners as well as restrictions for the industry’s energy consumption nationwide
Exchange News:
Binance is joining the executive committee of the Chamber of Digital Commerce, a U.S. lobby group for the blockchain industry to contribute to research and potentially influence the shape of crypto legislation through discussions with policymakers and regulators
FTX will try to clawback millions of dollars in donations to US politicians made by SBF and his close associates to help pay back creditors following accusations that the contributions were funded with customers’ money
Several Bitcoin wallets worth 104 BTC ($1.7M), associated with the defunct Canadian crypto exchange QuadrigaCX have transferred funds after three years of dormancy
OKX will list BNB (BNB) for spot trading
DeFi News:
Sushi DAO vote to direct all fees generated by SushiSwap to the protocol’s treasury passed thanks to two large entities - GoldenChain, the digital investment arm of venture capital outfit Golden Tree, and a wallet closely tied to crypto trading firm Cumberland
BNB Chain has partnered with Fjord and Balancer to launch Liquidity Bootstrapping Pools (LBPs) on its mainnet
BitDAO considering a $100M buyback of its bit token beginning from the start of next year as part of the DAO’s capital deployment strategy
THORChain's borrow program does not liquidate - coming Q1 23
CME Group and CF Benchmarks launched new DeFi reference rates and real-time indices for Aave, Curve, and Synthetix - not tradable products
NFT/Gaming/Metaverse News:
Chinese Zhejiang Province aims to build a $28.7B metaverse industry by 2025
Polygon partnered with the neo-banking app Hi to create a platform to mint Polygon NFTs as the face of a web3-focused debit card
Mercedes Benz has filed trademark applications claiming plans for: NFTs, Virtual clothing + goods, Financial services, Cryptocurrency trading
Art auction house Christie’s sold 87 NFTs for a total of $5.9M in 2022, down 96% compared to 2021
European aerospace giant Airbus chose Avalanche as its home for digital collectibles. Its first collection celebrates the 30th anniversary of its Airbus Helicopters with nearly 130,000 employees
Fundraises:
Axelar Ecosystem Startup Funding Program, a $60M initiative led by top-tier, crypto-native investment firms designed to nurture a pipeline of developers building Web3 products that rival anything on the centralized web. Investors: Blockchange, Chorus One, Collab+Currency, Cygni Capital, dao5, DCVC, Divergence Ventures, Dragonfly Capital, Lemniscap, Morningstar Ventures, Nima Capital, Node Capital, North Island Ventures - @axelarcore
Revel, an NFT or “social collectibles” platform, raised $7.8M in seed financing to become the Instagram and Robinhood of NFT platforms led by Dragonfly Capital and includes Union Square Ventures, Sfermion, 6th Man Ventures, Gaingels, Wagmi Ventures, Alumni Ventures, Global Impact Ventures, Hansa Labs and Polygon - @RevelXyz
DeFi technology company Pods raised $5.6M in Seed Funding to create structured products for crypto assets earlier this year. Investors included: IOSG, Tomahawk, Republic, Framework Ventures, 4RC, Alexia Ventures - @PodsFinance
Arrakis Finance, a decentralized market-making protocol, raised $4M in a seed funding round SAFT involving Uniswap Labs Ventures, Accel, Polygon Ventures and Robot Ventures - @ArrakisFinance
LumiShare, a Dubai, UAE-based a blockchain-based digital asset management ecosystem, raised $3.2M in funding led by His Highness Sheikh Mohamed Bin Ahmed Bin Hamdan Al Nahyan from the Abu Dhabi royal family - @IllumishareSRG
Bitcoin development company, Layer 2 Labs raised a $3M seed round from angel investors to bring drivechains and other innovative technologies to Bitcoin - @LayerTwoLabs
Concordex, the first dedicated DEX built on Concordium, raised $1.7M in seed funding to bring institutional-grade derivatives to the Concordium blockchain ecosystem from Tacans Labs, Skynet Trading, Seier Capital and Concordium - @concordexlabs
Early Stage Projects:
Waves founder Sasha Ivanov announced the launch of a new stablecoin with a solution for the currently unpegged USDN before launch
SUI Token Community Access Program - FAQ
Y2K Finance token coming soon
Mojito Markets, an Aptos DEX, lost funds due to FTX and Alameda and will suspend project development until the financing situation improves
Symbiosis v2 launch
Morphous is now live - a router for DSProxy (smart contract wallet) users
Nostra money market is live on mainnet
Fluidity launches on mainnet, introducing a new DeFi primitive that rewards users for spending
Element NFT Marketplace Launchpad is coming
Presenting the Linera Whitepaper - Fast and scalable multi-chain programming for the next generation of web3 applications
Research/Reads:
Nansen - The forest for the trees: Are crypto valuations and fundamentals signaling the end of this crypto winter? - source
The Biggest Story in Crypto in 2022: Contagion—From Terra to FTX - source
Visa - Auto Payments for Self-Custodial Wallets - source
Nasdaq - What Metaverse Venture Investment in 2022 Can Tell Us About 2023 - source
Coinbase - Regulating Crypto: How we move forward as an industry from here - source
Annual Report 2022: Capture investment trends from evolutions of 5 major crypto verticals - source
Holistic overview of the existing Web3 Infrastructure and what we need to focus on going forward - source
Have you seen our institutional-quality research?
Crypto Twitterverse:
Did we miss anything or is there anything you want to discuss? We’d Love to hear your feedback and engage with the community! Feel free to leave a comment and let us know your thoughts on the Crypto market!
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