Weekly Alpha Leak đ° A Stroll Down Memory Lane - The Ghosts of Crypto Narratives Past
Week of October 1-7, 2022
Not a ton of new and exciting things to talk about recently⌠So today weâre taking a stroll down crypto memory lane. Letâs relive some of the recent hottest narratives and see how they played out..
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TL;DR:
- Where Are They Now? The Ghosts of Crypto Narratives Past: SoLunAvax, FOAN, Curve Wars, Metaverse/Gaming Coins, Meme Coins
- Top Bullets: ââBNB Chain $100M cross-chain bridge exploit, Celsiusâ top 3 executives withdrew $42.13M before crash and bankruptcy, Do Kwon rescinded passport and first Terra employee arrest, Tether commercial paper cut to less than $50M, BNB Chain accelerator 27 web3 startups winners and 7 investments, FTX Dollar Spot Index, EDX Markets to work with Paxos as its custodian, Mt. Gox disbursements will likely occur next year
- Data Highlights: DeFi TVL: $55B. In the past month: Ethereum sales: $350M - down 20.89%, Solana sales: $110M - up 101.79%, OpenSea down 38.49% in volume, Magic Eden up 53.56% in volume. Largest Smart Money Inflows this month: Compound ETH, Compound USDC, Compound DAI, Wrapped BTC, stETH, Aave WETH and WBTC. Largest Smart Money Outflows this month: USDC, WETH, Rocket Pool and USDT. Highest Volume NFT collection of the past week: Renga: 5900 ETH
- DeFi Highlights: Sushi DAO new Head Chef, GoldenTree $5M stake in SUSHI, Celsius provides users' names and trading history in legal filing, Lido Finance launching on Arbitrum and Optimism, How Aave v3, should be deployed, MakerDAO $500M for investing in U.S. short treasuries and corporate bonds, GMX backend contract code for synthetics complete, Launch of Ribbon Lend, AVAX on THORChain Mainnet, 1inch wallet Unstoppable Domains partnership, Frax Finance proposal to partner with The Tie
- NFT/Metaverse Highlights: Gary Vaynerchukâs VeeFriends plush toys and vinyl figurines in Macyâs and ToysâRâUs stores, 3ACâs Starry Night Capital's NFTs collection moved to liquidators, Mythical Games creates Mythos Foundation, Hugo Boss/Imaginary Ones 360-degree metaverse experience, Moonbirds DAO launch early 2023, Dapper Labsâ NFT platform LaLiga Golazos beta, NFT-related trademark applications in the U.S. tripled
- Government, Regulatory and Legal Highlights: European Council passed MiCA, US SEC charges Kim Kardashian, U.S. unemployment rate reinforces the Fedâs hawkish stance, CFTC serves legal summons to Ooki DAO members through online forums, SWIFT framework for a global CBDC system, Nasdaq no immediate plans of launching a crypto exchange until better regulatory clarity, EU crypto prohibitions on Russia tightened, OpenSea employee accused of fraud defense strategy, CFTC action against Digitex Futures, SEC charges 4 men for pump-and-dump scheme worth $36.8M, NFT firm seeks US election commissionâs approval to market campaign souvenirs, SEC emergency shutdown of scam targeting Latino community
â Crypto Highlights of the Week â
Where Are They Now? The Ghosts of Crypto Narratives Past
Itâs been a long and crabby bear market, hasnât it? Very few catalysts have led to any type of sustained pumps. What about the narratives of yonder past? Letâs take a little stroll down memory lane and review some of the past ânarrativesâ we had just before things really went to hell. What we can see in hindsight is the rotatooors rotating from one hot thing to another as liquidity sloshed around and leaving behind a trail of broken hopes and dreams. Not to rub salt in anyoneâs wounds, but at one point or another, these were the âinâ coins and now they ain't doing too hot.. Which will come back and which are the new dino coins?
SoLunAvax - Battle of the Alt L1s
So this one started popping up last year among exorbitant ETH gas fees and everyone looking for the next âETH killerâ and it for sure ripped and outperformed during the last bull run. Solana, Luna and Avax - this power trio took turns leading rallies and hitting new highs during the last bull run. Where are they now?
Solana:
- This bad boy absolutely destroyed it and ripped till November when the market started turning. It has since returned to Summar 2021 levels and given up all those gains. Many out there believe that itâs only a matter of time before Solana comes back and evidence of that can be seen in the Solana NFT market, which has maintained life during this bear. Another train of thought is that when new and shiny VC backed chains like Aptos and Sui come out, interest in the old toys will wane for the shiny and new chains. Crypto is a space that runs on hype and narrative, after all.
Luna:
- Unlike Solana which fell off in November and wasnât able to regain its former power, Luna absolutely re-ripped starting in February and managed to make new all time highs in April before the major crash and death spiral that effectively killed this project in May and had far reaching ripple effects in the crypto space. We have since seen financial games being played with Luna Classic and Luna 2.0 and now we of course have crazy legal battles ongoing with Terra and Do Kwon. Many people got burned here.. Wild ride. Hard to see this one coming back.
Avax:
- Avalancheâs Avax followed a similar path to Solana, it had a crazy run until November where everyone on twitter had little red triangles in their names and then has slowly grinded and bled down since, being unable to regain the same hype despite the introduction of subnets and heavy ecosystem development funding. This one is poised to survive the bear just fine due to all that funding but the question remains of whether the market will return to last seasonâs winners or look for something shiny, new and exciting to hype up. Either way, Avax is currently maintaining above summer 2021 lows.
FOAN - Fantom, One, Atom, Near - Battle of the Alt L1s part deux
Fantom:
- Fantom was another major ripper during the 2021 bull but life was first breathed into the âFOANâ trade at the end of December and for Fantom, the run was short, only managing to stay alive until mid January before crashing and bleeding all the way down to the pits of Tartarus. In the meantime, prominent founder Andre Cronje has since fallen from grace and exited the crypto space for the time being - all adding to the uncertainty of this project.
One:
- Harmony One. This one was another strong performer which fell off hard in November, sprung back up with impressive resilience and then crashed straight to fucking hell. The most interesting thing to come from Harmony was the game DeFi Kingdoms and that has also basically died since. This one is trading well below the summer 2021 lows and has a questionable future ahead of it.
Atom:
- Atom has recently received a bit of hype with their Atom 2.0 and interchain security announcements however it wasnât enough to move the price considerably. This one has a bit of a reputation for being cursed and you can see evidence of that in how compared to some of the other coins being compared here, this one struggled to make the same type of massive gains. It double topped in September and January and has bled since with the recent little bounce being linked to the recent announcements. Despite the unimpressive past performance, with the recent support of Delphi and others who believe in the future of appchains, this one has a potential future ahead of it.
Near:
- The time frame for this one saw it survive the November crypto crash relatively well and successfully rip to new highs until early January before selling off and then finding some resurgence in March and April. It has since crashed hard and been grinding above the summer 2021 lows. This one is heavily VC backed but has very weak marketing power and name recognition in comparison to the massive brand recognition Luna and Avax had.
Curve Wars
- The Curve wars narrative started blowing up in November and December before promptly dying in early January. The story for this one was interesting - phrased as DeFiâs fight for liquidity. It sure captured the imagination of market participants during a time when it seemed there were few narratives to rotate into. Overall, DeFi has been relatively dead however many have high hopes for upcoming narratives such as real yield to breathe some life back into this sector. Will the hype around amassing governance voting power to control that vital liquidity resurface?
Metaverse/Gaming: Gala, Mana, Sand, Defi Kingdoms
- Each of these had a very similar playbook. They were super hot until November, upon which time they bled straight to hell. Jewel in particular sticks out as this was shilled heavily by CT influencers and has since died horribly with little chance of coming back due to problems with their team and how theyâve managed the project. Letâs not also mention the disgustingly overinflated fully diluted values of each of these projects and high emissions. Itâs fascinating to look back in hindsight at how everything played out. What goes up, must come down.
Mana:
Sand:
Jewel:
Honorable mentions - Meme Coins:
Doge:
- The mania for this one peaked in early May - when Elon Musk got on Saturday Night Live and shilled it. It has been decimated ever since.
Shiba Inu:
- This one may look the same but this timeframe was pushed back a bit once the dog coin mania was established. This one ran all the way until the end of October before slow bleeding to death.
For Another Time:
Prominent Figures: Do Kwon, Su Zhu, Andre Cronje, Daniele Sesta, etc
Would you like to read about where some of these prominent figures are today?
đThis Weekâs Top Daily Bullets đ
- BNB Chain $100M cross-chain bridge exploit. Hackers attempted to drain $560M in BNB tokens from the blockchainâs bridge, with more than $100M successfully siphoned to other chains. BNB Chain will adopt on-chain governance votes to determine future actions, including whether to freeze hacked funds. Since July 2021, 11 large cross-chain bridge attacks have occurred, involving more than $2B
- Crypto lender Celsiusâ top three executives, Ex-CEO Alex Mashinsky, ex-CSO Daniel Leon and CTO Nuke Goldstein, withdrew $42.13M in crypto between May and June, right before the company suspended withdrawals and filed for bankruptcy. â Celsiusâ co-founder Daniel Leon resigns following Mashinskyâs leaving. Leon is at least the eighth crypto sector executive who has resigned in recent months. The final bid deadline for Celsiusâs asset auction will be Oct. 17
- South Korea has ordered Terra founder Do Kwon to return his local passport in 14 days or risk losing the passport, and re-applications may be rejected. The first arrest in the ongoing investigation also reportedly took place with the arrest warrant being rescinded since - Yu, head of general business operations at Terraform Labs - allegedly used bot programming to inflate and manipulate the market price. South Korean prosecutors frozen $39.6M of crypto assets, including BTC, owned by Do Kwon through two exchanges however Do claims the funds are not his
- Stablecoin issuer Tether has cut its commercial paper holding to less than $50M and plans to bring its commercial paper holdings to zero by the end of the year
- BNB Chain accelerator announces 27 web3 startups as winners and seven projects will receive investment from Binance Labs
- FTX has listed FTX Dollar Spot Index $FTXDXY perpetual futures
- Citadel and Fidelity-backed exchange EDX Markets will work with Paxos as its custodian. Paxos is regulated by the New York Department of Financial Services and will hold all EDXM customer assets in a bankruptcy-remote trust, in fully segregated U.S. accounts
- Mt. Gox Bitcoin exchange creditors can now register to select a repayment method. Not clear when the disbursements will happen, but will likely occur next year
These are just our top bullets, want more? Check out our daily newsletter:
Whatâs your take on this weekâs news? Anything interesting that you have to say about these stories? Did we miss anything that shouldâve been included?
đ° Fundraising Highlights of the Week đ°
đ Crypto Market Data Highlights of the Week đ
- DeFi TVL: $55B
- In the past month:
- Ethereum sales: $350M - down 20.89%, Solana sales: $110M - up 101.79%
- OpenSea down 38.49% in volume, Magic Eden up 53.56% in volume
- Highest Volume NFT collection of the past week: Renga: 5900 ETH
Nansen Smart Money:
- A gauge of how risky or risk adverse smart money is feeling. Weâre near the June bottom levels but also slowly ticking downward? Too early to tell but they are considerably more stabled up than they were all of the bull run and the early stages of the bear.
- Largest Smart Money Inflows this month: Compound ETH, Compound USDC, Compound DAI, Wrapped BTC, stETH, Aave WETH and WBTC. Interesting to see that instead of holding the actual coins, smart money is choosing to move their crypto in Compound, Aave, Lido derivatives
- Largest Smart Money Outflows this month: USDC, WETH, Rocket Pool and USDT. So basically moving out of stables, ETH and ETH staking
Nansen Hot NFT Contracts:
- Highest Volume NFT collections of the past week:
- Renga: 5900 ETH
- LUSDBondNFT: 3933 ETH
- CryptoPunks: 2897 ETH
- Kitaro: 2104 ETH
- BAYC: 2082 ETH
đŚ DeFi Highlights of the Week đŚ
- Sushi DAO voted to elect former Eons Finance CEO Jared Grey as new Head Chef. Asset management firm GoldenTree, with about $47B in assets under management, has taken a $5M stake in SushiSwapâs governance token SUSHI
- Celsius provides users' names and trading history in legal filing as part of its bankruptcy proceedings which may identify many anonymous crypto usersâ wallets
- Lido Finance has launched on two layer-2 networks - Arbitrum and Optimism
- The Aave community is currently voting on how the latest update, Aave v3, should be deployed - the majority of the votes support creating a standalone new version rather than upgrading the previous one
- MakerDAO has allocated $500M for investing in U.S. short treasuries and corporate bonds - initiated by DeFi asset advisor Monetalis and lead by digital asset bank Sygnum
- GMX update - the backend contract code for synthetics is complete
- Launch of Ribbon Lend - expansion into the credit market
- Avalanche C-Chain integration completed - native AVAX is now on THORChain Mainnet
- 1inch wallet users get domain names with Unstoppable Domains partnership
- Frax Finance proposal - partner with The Tie to increase institutional understanding, data access, and contact points for the FRAX ecosystem
đ˘ NFT/Metaverse Highlights of the Week đ˘
- Gary Vaynerchukâs NFT project VeeFriends will launch plush toys and vinyl figurines later this month through Macyâs and its ToysâRâUs in-store brand
- Three Arrows Capital's liquidators have taken control of Starry Night Capital's NFTs collection and moved to a Gnosis Safe wallet. Collection now valued at $840,000, a fraction of the $21M spent on it
- Mythical Games creates Mythos Foundation to decentralize web3 gaming and enlists Ubisoft, Animoca and others to launch Mythos DAO and the MYTH governance token
- Hugo Boss has teamed up with the NFT collection Imaginary Ones to launch a 360-degree metaverse experience
- An official Moonbirds DAO is planned to launch in early 2023, with creator Proof planning to seed the DAO with $2.6M worth of ETH and NFTs
- Dapper Labsâ NFT platform, LaLiga Golazos, based on the LaLiga Spanish soccer league will launch in closed beta later this month
- The number of NFT-related trademark applications in the U.S. has tripled since 2021. NFT trademark filings peaked in march and have fallen in every month since
đ¨ââď¸ Government, Regulatory and Legal Highlights of the Week đ¨ââď¸
- The European Council has passed MiCA, the EUâs comprehensive crypto regulation and if approved, laws will be in place at the start of 2024
- US SEC charges Kim Kardashian for promoting EthereumMax and Kardashian has agreed to pay $1.26M in penalties, disgorgement and interest
- The U.S. reported that the unemployment rate in September was 3.5%, below expectations and the previous reading of 3.7%. This will reinforce the Fedâs hawkish stance
- A judge in the Northern District of California will let the Commodity Futures Trading Commission serve summons and complaint to Ooki DAO members through online forums
- SWIFT, the interbank messaging system facilitating cross-border payments, has presented a framework for a global central bank digital currency system, claiming to have solved the challenge of interoperability between different networks
- US stock exchange, Nasdaq, has no immediate plans of launching a crypto exchange until thereâs better regulatory clarity from policymakers
- EU existing prohibitions on crypto assets have been tightened by banning all crypto-asset wallets, accounts, or custody services to Russia, irrespective of the amount of the wallet (previously up to âŹ10,000 was allowed)
- OpenSea employee accused of fraud, Chastain, is claiming the FBI violated his rights in the lead-up to his arrest, seeking to subpoena his former employer and trying to throw out any use of the term âinsider tradingâ in the case
- The CFTC is bringing action against Digitex Futures and its founder for failing to register and attempting to pump its token
- The SEC filed charges against four men behind Bermudan company Arbitrade Ltd., Canadian firm Cryptobontix Inc., and U.A.E.-based Sion Trading for allegedly running a pump-and-dump cryptocurrency token scheme worth $36.8M from 2017 until 2019
- NFT firm, Data Vault Holdings, seeks US election commissionâs approval to market campaign souvenirs such as digital tokens to political committees
- The U.S. SEC ordered the emergency shutdown of an ongoing fraudulent crypto offering targeting the countryâs Latino community that has raised $12M
The crypto space is a wild and fast paced, evolving landscape - however one filled with recurring themes and trends. The point of this newsletter is to highlight the story of crypto - as it's told over time. The board, the players, and the game itself. Follow along as we catalog and organize the chaos.
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