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Arbitrum Airdrops $145M in Tokens to DAOs

Arbitrum Airdrops 90.15 Million ARB tokens to DAOs. Coinbase sues the SEC for clarity. Binance backs away from Voyager. Plus the top deals, news, stats, and reports of the week.

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💵 Weekly Crypto Fundraises & Deals

Here are all the crypto fundraises we heard about this week, ranked by size…

🗞️ Crypto News Recap: The Top 5 Stories

Welcome back to This Week in Crypto… everything you need to know in one scannable format. Here are the top 5 stories of the week…

  1. 🪂 Arbitrum Initiates Token Distribution to Ecosystem DAOs- The core Arbitrum team previously designated 1.13% of the overall 10 billion token supply — equivalent to 113 million ARB tokens, with a current value exceeding $145 million — for distribution among qualified projects. This allocation for DAOs is distinct from the 11.6% of the token supply previously distributed as an airdrop to early Arbitrum users in March.

  2. ⚖️ Coinbase Sues the SEC for Answer on Rule Specific to Digital Assets- Coinbase is suing the Securities and Exchange Commission. The lawsuit follows on a petition for a rulemaking that the company filed with the SEC last summer, requesting the commission draft and approve a rule specific to digital assets. The lawsuit aims to force the agency to provide a yes or no to Coinbase's ask. Read the blog post from their Chief Legal Officer here.

  3. ⚖️ Do Kwon Seeks to Dismiss SEC Charges As South Korea Rules LUNA Is Not a Security - Terraform Labs co-founder and CEO Do Kwon has requested that charges brought against him by the Securities and Exchange Commission (SEC) be dismissed, according to court documents filed Friday. In his motion to have the SEC charges dismissed, Kwon argued the SEC’s claims are invalid, pushing back against the agency’s position that tokens including MIR, LUNA, and UST are securities.

  1. ⚖️ Terra Co-founder Daniel Shin and Nine Others Formally Charged by South Korea- South Korean prosecutors indicted Terraform Labs co-founder Shin Hyun-Seung (aka Daniel Shin) and nine others on multiple charges, including violations of capital markets law.

  1. 😞 Voyager Digital Says Binance.US Sent Letter Terminating $1B Asset Buy Deal - The crypto lender said the Binance.US deal is off and it will return value to customers via direct distribution.

  2. 💸 Ethereum Staking Outflows Hit $1.3Bn A Week After Shapella Upgrade- Staked Ether levels have dropped by $1.3 billion over the past week after the blockchain’s upgrade dubbed Shapella enabled withdrawals.

💬 Tweet of the Week

📊 Key Stats of the Week

Here are the most important and interesting stats in crypto this week...

1. Helium's migration to Solana marks one of the largest decentralized network transitions in history. Over 350K hotspots have migrated with limited issues reported.

Source: @MessariCrypto

2. 1.37 million $ETH worth over $2.56 billion at time of writing has been unstaked and withdrawn following the Shapella update.

Source: @iftikharpost

3. With Bitcoin's next halving roughly a year out, here's a visual representation of the "supply shock" that it creates on the market. Sharp decline in the rate of new supply issuance + Same level of demand = Upwards drift in price.

Source: @WClementeIII

4. U.S. exchange market share has actually increased slightly since the start of 2023, despite a banking crisis and regulatory crackdown.

Source: @KaikoData

5. $180M+ of NFTs bridged from Solana to Ethereum and Polygon

Source: @ourNetwork

📝 Highlights from the Top Crypto Reports

Here are the top highlights from the best crypto research reports this week…

Primer on Ethereum

The Ethereum blockchain network is a decentralized computation and transaction validation platform. The breakthrough introduction of smart contracts and a virtual machine on the network creates a decentralized Turing-complete software solution. There are thousands of applications built on top of the Ethereum blockchain. The protocol gained broad recognition after developing a deep decentralized finance ecosystem and, more recently, interesting Web3 use cases. The protocol made the transition to Proof-of-Stake from Proof-of-Work on September 15, 2022. The next step for Ethereum is to meet the growing demand for blockspace by creating a network of Layer-2 solutions that enable it to scale throughput while maintaining decentralization. Today, Ethereum is the world’s second-largest cryptocurrency by market capitalization.

Key Metrics

Financial Overview

The last year for crypto was marred by controversies, crashes, bankruptcies, and fraud. But, the first quarter of 2023 saw early signs of recovery in sentiment and price. A key accelerant to the narrative was failure of Silicon Valley Bank and Credit Suisse. Believers and non-believers of crypto were reminded of the need for hard stateless money and decentralized banking infrastructure run by code, not imperfect humans.

Bitcoin emerged as the primary beneficiary as macroeconomic concerns snowballed around the stability of the U.S. dollar and the fiat system at large. Ethereum benefitted as well with its sustainable monetary policy and a large ecosystem of decentralized applications offering a differentiated proposition.

Q1 2023 was Ethereum’s second quarter of negative net issuance. As market sentiment improved, there was an uptick in on-chain activity, which led to higher fees and greater burn. Cumulative base fees for the quarter rose by 50%, and cumulative priority fees increased by 5%. Over the quarter, the supply of ETH shrunk by ~79,000 ETH, 19 times higher than the burn last quarter.

Validators’ annualized real yield for the quarter was 5.9%, marginally lower than the 6% they earned in the previous quarter. Nominal yield was 5.6% lower by 0.4% for the quarter, but its impact was partially offset by higher net deflation of 0.3% compared to 0% in the previous quarter.

With lucrative real yields, there were strong flows into the staking contract for the quarter. Over 2.2 million new ETH was staked over the quarter, increasing staked supply to 18 million. At the end of the quarter, Ethereum’s staking ratio was 15%, up from 13% at the beginning of the quarter. Staking ETH was recently derisked thanks to the Shanghai/Capella upgrade that enabled withdrawals from the staking contract. With lower risk of staking, the amount of ETH staked should grow materially over the coming quarters.

🎧 Top Crypto Podcasts of The Week

Here are the crypto podcasts that are worth listening to this week...

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📰 The Coinstack Newsletter:

Tracking the most important blockchain stories of the 2020s, including a decentralized internet and the creation of a new open global monetary system that works for everyone. As always, published for informational purposes only. Please do your own research. Just our opinions. Not intended as financial advice as we are not financial advisors. We may own some of the digital assets we write about as we believe strongly in the sector. Please do your own research. Published and written weekly by Ryan Allis and Mike Gavela.

Coinstack is a news and analysis newsletter for the digital asset industry. None of the information here is a recommendation to invest in any securities or other types of investments. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All investments involve risk and may result in loss.

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