The Quiet Before the Storm

Daily Bullets: Wednesday, November 23rd

Nov 23, 2022

DCG owes Genesis money but claims they're fine while consulting with bankruptcy lawyers. Eisenberg's trading strategy leaves on-chain observoors confused. One of China's best known crypto investors hacked. Meanwhile tomorrow is Thanksgiving in the US. We're in the calm before the storm!
Reflecting on how the crypto market looked one year ago during Thanksgiving, we were practically right at the top. How much difference a year can make.
Hope your conversations with family this year aren't awkward if you got anyone to invest at the top..
Happy Thanksgiving!

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Daily Bullets:

DCG owes its own Genesis Trading arm $575M due May 2023, has $2.8B in outstanding loans
Eisenberg’s Curve/Aave strategy liquidated. Aave $1.6M bad debt. Unsure if successful on CEX
Shen Bo, founder of FENBUSHI Capital had his wallet hacked for $42M worth of assets
A dormant BTC-e exchange wallet sent 10,000 bitcoin ($165M) to two unidentified recipients
OKX launches Proof of Reserves
Binance CEO denies report firm met with Abu Dhabi investors for crypto recovery fund
Binance’s 29th project on Binance Launchpad - Hooked Protocol
ApeCoin DAO to launch NFT marketplace
Reebok filed 2 trademark applications for NFT related products
New York signed a two-year moratorium on new permits for PoW crypto mining
The World Economic Forum wants to work with Shiba Inu on global policy
DBS, the first Asian bank to use JPMorgan's blockchain fixed income trading network Onyx
FTX bankruptcy case to continue proceedings in Delaware and keep top 50 creditors redacted

Now for a more expanded and detailed look at the day…

Crypto News:

DCG owes its own Genesis Trading arm $575M due May 2023. Genesis has $2.8B in outstanding loans on balance sheet and hired the investment bank Moelis & Company to explore options including a potential bankruptcy

Avraham Eisenberg’s Curve/Aave trading strategy involving borrowed 40M CRV tokens liquidated leaving Aave with $1.6M of bad debt. Unsure if successful on CEX perps

Shen Bo, founder of FENBUSHI Capital had his wallet with a total of $42M worth of assets stolen just before the FTX hack. The exploit may have resulted from a compromised private key

A dormant crypto wallet attributed to the BTC-e exchange that's been linked to the 2014 Mt. Gox hack, sent a total of 10,000 bitcoin ($165M) to two unidentified recipients

New York Governor Kathy Hochul signed a two-year moratorium on new permits for PoW cryptocurrency mining operators that rely on carbon-based fuel to power their activities

DCG's Foundry Digital is buying two crypto mining facilities and other assets from Compute North with an option to acquire a third facility that is under development amid possible Genesis bankruptcy

The World Economic Forum, or WEF, wants to work with the meme-based cryptocurrency Shiba Inu on global policy

Economic/Government/Regulatory:

DBS, Singapore's largest bank by market cap, has become the first Asian bank to use JPMorgan's blockchain-based fixed income trading network Onyx, joining international heavyweights including Goldman Sachs and BNP Paribas

El Salvador’s presidency dispatched a digital-securities bill to lawmakers, taking the nation a step closer to raising $1B via the world’s first sovereign blockchain bond

The Japanese central bank will begin experiments with a proof-of-concept digital yen CBDC early next year

Australia’s financial watchdog sued an Aave and Coinbase-backed fintech company, Block Earner, for unlicensed crypto services

Exchange News:

The judge overseeing the FTX bankruptcy case agreed to continue bankruptcy proceedings in Delaware and keep the names and addresses of the top 50 creditors - owed approximately $3.1B - redacted for now

OKX launches Proof of Reserves

Binance Pool has officially launched the RavenCoin (RVN) mining service with mining fees set at 1%

Binance CEO denies report firm met with Abu Dhabi investors for crypto recovery fund

DeFi News:

Ethereum developers launched a new devnet to test the unlocking of ether staked with validators

ENS DAO has voted to select the treasury management platform Karpatkey DAO to manage its endowment fund

NFT/Gaming/Metaverse News:

ApeCoin DAO to launch NFT marketplace for Bored Ape Yacht Club, Mutant Ape Yacht Club, Bored Ape Kennel Club and Otherdeed NFTs - will honor creator royalties

Reebok filed 2 applications to trademark its name for: NFT-back media, Virtual footwear, headwear, sports equipment, Retail stores with virtual goods, Online marketplaces for NFT-backed goods

An NFT collector who goes by the pseudonym "Vincent Van Dough" launched a new NFT gallery called Art of This Millennium

The Argentine Football Association’s crypto fan token ARG plummeted as Argentina lost against Saudi Arabia in the FIFA World Cup

Unity is integrating Tezos blockchain in games’ development engine

Fundraises:

City State Entertainment raised $15M to fund games with massive medieval battles using a new game engine

Onomy Protocol, a Cosmos-based DeFi protocol aiming to converge DeFi and forex markets, raised $10M from Bitfinex, GSR, Ava Labs, CMS Holdings and DWF Labs

Web3 identity builders Carv raised $4M, valuing it at $40M

NFT infrastructure protocol Vinci Protocol raised $2.1M in a seed funding round led by UOB Venture Management, SigNum Capital, and TGE Capital

Insert Stonks raised over $550,000 in a pre-seed round for the development of its Web3 game monetization infrastructure led by FunFair Ventures

Early Stage Projects:

Binance’s 29th project on Binance Launchpad - Hooked Protocol (HOOK). Binance Labs, Sequoia Seed Fund, and A&T Capital are its seed investors, hoping to become an X-to-Earn aggregator

Stride distributed 4% of its $STRD governance token via airdrop

The Shockwave Omega mainnet upgrade is scheduled for December 13, bringing a new WASM engine with increased dApp performance for Secret 2.0

Introducing RolodETH, an open-source database of Ethereum addresses with names, tags, and more

Introducing Paddle - a Move Virtual Machine (MVM) rollup for Cosmos

What’s your take on today’s news? Anything interesting that you have to say about these stories? Did we miss anything that should’ve been included?

Data:

TL;DR: Almost a year ago we were right at the top of the bull market. Then the bear market began. Looking at exchange flows going into the holiday weekend, people are sending depositing USDT and LINK onto exchanges and withdrawing their USDC, ETH and BUSD.

How the crypto market looked one year ago during Thanksgiving, we were practically right at the top

Looking at what’s being sent onto exchanges (to presumably sell), we’ve got USDT and LINK at the top. USDT has also been slightly depegged for almost 2 weeks now

Looking at what is being withdrawn off exchanges (presumably to the safety of self custody), we’ve got USDC, ETH and BUSD

Research/Reads:

Pantera - FTX Underscores The Importance Of DeFi - source

$crvUSD White Paper - source

Takeaways from FTX's First Bankruptcy Hearing - source

The "World Cup effect" in the stock and crypto markets - source

Reckless: The Story Of Cryptocurrency - Chapter 1: The History Of Interest Rates - source

Rollup, Validium, Volition — Where is Your Data Stored? - source

How Zero Knowledge Proofs, Aggregation Layers, and Light Nodes Can Improve Web3 Experience and Structure? - source

Innovating the Fantom Virtual Machine - source

Crypto Yield Sources: Not all Yield is Created Equal - source

Defi 101: Curve Finance - source

Have you seen our institutional-quality research?

M6 Research

Crypto Twitterverse:

Liz Hoffman @lizrhoffman

Letter SBF sent today to FTX employees h/t @CoinDesk

Ryan Selkis 🥷 @twobitidiot

1/ THE STATE OF CRYPTO

Aave @AaveAave

1/6 We want to address the cycle of liquidations that occurred in the CRV pool on the Aave Protocol today. The liquidations were successful (and worked as designed), but unfortunately, the size of the position left some excess debt within the protocol.

Arkham | Crypto Intelligence @ArkhamIntel

The aftermath of @avi_eisen's on-chain CRV short. What went right, and what went wrong. Did AAVE 'win' this round? Lets dive in. 👇

Delphi Digital @Delphi_Digital

1/ The FTX fallout has the potential to impact crypto for years to come. Today, new information brings confusion, speculation and the potential for another bankruptcy. Here is the short 20 tweet version of events, simplified with numbers & data visualization: 👇🧵

Lucas Nuzzi @LucasNuzzi

1/ Over the past few weeks, my team at @coinmetrics has been obsessed with answering one question: How did Alameda manage to lose billions of dollars of FTX user funds? I think we've found some answers 👇🧵

foobar @0xfoobar

Curve launched their stablecoin whitepaper today, called LLAMMA (lending-liquidating amm algorithm) Been thinking about how lending markets are linked to fickle dex liquidity, LTV params are similar to option pricing Both brilliant and simple, here's a quick explainer: 🧵

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!