NOTE:
Before diving into this past week’s M3TA Recap, we voice our sympathy for those affected by all that has happened concerning FTX, Alameda Research, Sam Bankman-Fried, and the like. Here at M3TA, we strive to provide current event coverage, introductory educational content, and in-depth research from a purely neutral perspective on all fronts. Any comments that seem to demonstrate favor or disapproval for FTX are not ours but strictly a recounting of the opinions of salient others.

MARKET WRAP

1. Crypto Market Going Sideways While Girding Itself For the Standing-by Price Turbulence

CoinDesk – November 21, 2022

Cryptos

After severe slumps in its daily price performance resulted from the FTX calamity, BTC struggled to grasp an inch above its US$16,000 resistance line in a 12-day streak. As one would expect from such a temporary plateau from the largest crypto by market value, a tide of volatility should be well seen on the price horizon. ETH was wrapped in an air of weary resignation when the FTX hacker, who pocketed $500M in an earlier cyberattack aiming at FTX, decided to cash out by slowly converting the stolen funds into an extremely large number of ETH tokens over the past week - so large that the attacker is now in the league of largest ETH holders. In contrast, since the dawn of the World Cup has made its arrival, some of the Fan tokens linked to the world’s largest sports event have skyrocketed with all green flags. Among those is CHZ - the native token of Chilliz blockchain - which is powered by the largest sports fan token maker platform Socios.com and has witnessed a striking 30-day 215.07% soar through last Friday.

Insight

The bear run of Bitcoin to settle below the hopeful US$17,000 is a warning sign clear as day for the currency investors that price volatility is just around the corner, according to Joe DiPasquale, CEO of crypto fund manager BitBull Capital. He added that the crypto summer will not come anytime soon unless the price of BTC is kept above the support level of US$15,500. Once the price is successfully sustained above the said benchmark, investors could see the price pumping toward $18,000 in the short term. On the other hand, it does not seem that The Fear and Greed index has ever left its devastating Extreme Fear realm throughout the FTX bubble’s outburst for the time being.

Equities

While the cryptosphere as a whole was continuously drenched in layers after layers of disappointment, the traditional market speared through the week with an entirely different viewpoint. Nasdaq was seen to go up by 0.01% while S&P 500 and the Dow Jones Industrial Average (DJIA) made improvements of 0.48% and 0.59% respectively.

Takeaways

After a stressful period of the FTX crumble - which may or may not have ended here - the market needs time to recover. Most importantly, the market needs to re-establish its trust with investors who are always at the most vulnerable state when certain market factors deviate from their expected trajectory. Without sustainable solution rollouts in the future, it is almost impossible for potential investors to emerge from their dubious shadow and for the underestimation of decentralized potentials to be proven otherwise. Our path to explore and cohabitate with decentralized technology is still nascent, and it is through these tough times that the crypto market will attest to its strength.

2. Grayscale - Digital Currency Investing Firm Refuses to Share Proof-of-Reserve

CryptoNews – November 20, 2022

The crypto-investing fund Grayscale recently took to Twitter and addressed why they did not want to publish their Proof-of-Reserves for fear of putting their security at risk. 

The firm reasoned that their resolution to keep the information private might upset many investors. However, as stated in one of Grayscale’s tweets, protecting their investors’ assets was at the top of their priorities, and any surge of emotional dread experienced externally would not be enough for the complex security arrangements to waver.

Their decision, nevertheless, was met with total confusion and objection from the majority of crypto investors due to the strong willingness of other major platforms, such as Binance and Crypto.com, towards making their proofs-of-reserve - emblems of transparency in the crypto world - known.

Revealing an exchange’s proof-of-reserve is considered a newly essential methodology that some centralized exchanges have adopted post-FTX-crisis to verify whether such platforms still retain custody of deposited cryptocurrencies on behalf of users.

3. One of the Biggest Esports Teams Terminates a $210M Sponsorship Contract with FTX

CryptoNews – November 17, 2022

Several sponsors have acted out of FTX’s branding connection with their brands, including TSM - a professional esports organization who closed a deal of more than US$200M with FTX in 2021 which requests TSM to distribute a part of the US$1M FTT - the FTX’s native token - which they had purchased to their players and employees. However, according to The Washington Post, TSM had completely sold all FTTs by Q2 2022. They now claimed that there had been an immediately effective suspension imposed on their partnership with FTX and that all FTX branding will be removed from TSM merch products. TSM concluded that the collapse of FTX would not have any kind of effect on TSM’s usual operating plan. 

4. Solana Got “Boycotted” by More Exchanges

Coin Telegraph - November 17, 2022

Among the most recent measures taken by major cryptocurrency exchanges has been the deposit suspension of Solana-based USDT and USDC. Following the radical move of Crypto.com two weeks ago were OKX, ByBit, and most noticeably Binance. It is worth noting that the withdrawal and deposit functionality operated by the mentioned exchanges for these stablecoins still accepts funds from all other blockchains. In an attempt to mitigate the confusion surrounding their stablecoin accessibility, the issuer of USDC Circle later declared via a tweet that the distribution and repossession of USDC were still going strong without any price-related turbulence or interruption.

Concurrently, on-chain data also shows an inordinate skew towards USDC’s circulating coins on Solana compared to those of USDT, which see a two-and-a-half difference in amount at the time of writing.

Despite this fact, Binance later lifted the barrier for Solana-USDT but removed USDC as a tradable asset; that is to say investors are allowed to make deposits in USDC, but the same amount of USDC will automatically convert to an equal Binance USD (BUSD) amount.

5. On-chain Earnings from DeFi Platforms Get the Better of Those from CEX One Week Post-FTX-Fallout

Coin Telegraph - November 16, 2022

Data points retrieved from Token Terminal last week indicated that up to 9 protocols and decentralized platforms reaped more than US$100,000, with Ethereum leading the board at a far distance of US$7M from the NFT marketplace OpenSea - which sat in second place.

Source: Token Terminal

Other statistics revealed that the chaos caused by Alameda Research and FTX had continued to inflict damage on:

(1) CEXs with immense total transaction volumes recorded as high as US$5B on Nov 8, reportedly due to token migration from these centralized platforms.Source: Token Terminal

(2) Ren - a closely connected protocol with Alameda Research - whose TVL took a 50% plunge.Source: Token Terminal

(3) blockchain earnings with below zero net profits across the board of Polygon, BNB Smart Chain, Bitcoin, and Optimism, except for Ethereum, despite the rise in revenue.

Source: Token Terminal

6. Nike Steps in the Game of Web3 with .Swoosh

Nike - November 14, 2022

 

After its first collection of virtual NFT sneakers called “Cryptokicks” and the creation of Nikeland in the one and only “metaverse” Roblox, Nike has yet again proved that it is taking the cryptospace seriously with its beta launch of .Swoosh on November 18. Reportedly, .Swoosh aims to become:

- an accessible space for the Nike loyal community while, on the other hand, presenting a promising business opportunity at the core. It does this by letting users purchase both virtual and physical products that are designed by their community members on the web3 platform.

- a user-friendly web3 that allows users to collect and celebrate virtual Nike products such as sneakers or jerseys, participate in the co-creating process of the “next-gen Nike virtual creations” possibly through community challenges, earn royalties on their sales, and most importantly, learn about web3 - the visible future of internet service.

As mentioned, the project is still in a closed beta testing phase, which means there are only a limited number of registrations opened, and per Nike’s published roadmap, they are on their way for distribution this month.

So far, the only visible limitation seen from .Swoosh has probably been the choice of currency, which only accepts the dollar currency instead of cryptocurrency. However, this might change any time soon as decentralized digital currencies gain more popularity in the near future.

Fun fact: The web3 .Swoosh actually follows the lead of one of the latest Nike-acquired firms RTFKT (pronounced “artifact”), who appears to have the perfect relevant background in web3 development to guide Nike on this idea.

7. Terra Co-Founder’s $104M Worth of Assets Frozen by a South Korea District Court

Coin Telegraph - November 19, 2022

In line with the fraud-filled FTX’s on-going legal investigation, 6 months after the fall of Terraform Labs, South Korean authorities managed to freeze over US$104M asset value from Shin Hyun-Seong, the co-founder of Terra, due to his allegedly illegal methods of gaining profits. The accusation was based on a claim indicating Shin’s association with selling pre-issued Terra LUNA tokens to unwary investors though this was later denied by Shin’s attorney. At the moment, Shin might have to face up to 2 major charges: issuing in-house tokens LUNA and TerraUSD (UST) with an attempt to gain unregulated profits and disclosing customer transaction information of Chai without permission or transparency.