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This Week in Crypto: The New Frontier in Finance

Celisus' Customer Accounts Made Public, Maker Buys $500M in Treasuries, BNB Chain $127M Hack, Bored Apes Get Probed by SEC, Tatum & NXYZ Raise $40M+

Author

Ryan Allis
October 12, 2022

Social Links: Twitter | Telegram | Podcast | Newsletter | NFTs | Fund

Issue Summary: Welcome back to Coinstack, the best weekly newsletter for crypto investors and industry insiders, where we review the top news and reports in the digital asset ecosystem. Reporting live from the depths of crypto winter where there’s still a lot more activity happening than in 2018/2019. Hang on till 2024 and keep building, friends. Good times remain ahead as we evolve to a world where all financial assets are tokenized and all markets operate 24/7 on transparent distributed ledgers.

In This Week’s Issue:

  1. 🗞️ Top Weekly Crypto News - Celsius Customer Account Names Made Public By Court, MakerDAO Votes To Buy $500M of US Treasuries, BNB Chain Resumes Post $127M Hack, Bored Apes Get Probed by SEC

  2. 💵 Weekly Fundraises - Tatum ($41M), NXYZ ($40M), Zerion ($12M)

  3. 📊 Key Stats - 44% of Top 100 Public Firms Using Blockchains, MetaMask Passes 30M MAUs, Polygon Q3 2022 Stats

  4. 🧵 Thread of The Week - ETH’s First Deflationary Week Deep Dive

  5. 📝 Report Highlights - State of Avalanche Q3 2022

  6. 🎧 Best Crypto Podcasts - Coinstack, Bankless, Real Vision

  7. 📈 Top 10 Tokens of the Week - XVS, DESO, XWC

  8. 👂 Coinstack Podcast Episodes

  9. 💬 Join Our Telegram Group

  10. 📚 How To Get Started With Crypto Learning

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🗞️ Crypto News Recap: The Top 10 Stories

Welcome back to This Week in Crypto… everything you need to know in one scannable format. Here are the top 10 stories of the week…

1) 😢 Celsius Customer Files Distributed By Courts in 14,500 Page Bankruptcy Filing, Reveals Largest Holders Publicly - In an unusual privacy breach caused by a court filing made public, all Celisus customers are now known and in a searchable database. Fifteen Customers had more than $10M with Celsius. We hope the Celsius/Voyager debacles of 2022 are a wake up call for both industry participants and regulators to require customer crypto deposits be segregated not intermixed with other creditors.Source: Celsius Networth

2) 💸 MakerDAO Votes to Allocate $500M Into US Treasuries, Bonds - The DAI stablecoin was converted for this diversification effort, with 80% going toward US short-term Treasuries and 20% to investment-grade corporate bonds.

3) ⛓️ BNB Chain Resumes Service After Hacker Siphons $127 Million- BNB Chain has restarted the blockchain after being halted for several hours last Thursday. Hackers attempted to drain $560 million in BNB tokens overnight from the blockchain’s bridge, with $127 million successfully siphoned to other chains.

4) 🦍 Bored-Ape Creator Yuga Labs Faces SEC Probe Over Unregistered Offerings - The Securities and Exchange Commission is investigating Yuga Labs, the creator of the popular Bored Ape Yacht Club collection of NFTs, over whether sales of its NFTs and issuance of ApeCoin violate federal law.

5) 😈 Solana DeFi Trading Platform Mango Markets Loses $100M in Hack - A hacker stole roughly $112 million from cryptocurrency exchange Mango Markets, built on the Solana crypto platform, then offered to give most of it back if no charges were filed.

6) 👋 OpenSea CFO Leaves Less Than One Year After Joining - OpenSea CFO Brian Roberts has left the NFT marketplace company less than a year after he joined, according to his LinkedIn update posted on Friday. OpenSea is currently processing around $300M per month in NFT trading volume down about 95% from around $5.1B per month in April 2022.

    7) 💰 America’s Oldest Bank, BNY Mellon, Will Now Hold Crypto - The nation’s oldest bank said it would begin receiving clients’ cryptocurrencies on Tuesday, becoming the first large U.S. bank to safeguard digital assets alongside traditional investments on the same platform. The bank is using software developed with Fireblocks to store digital holdings, BNY Mellon said. Chainalysis will help the bank analyze and track the path the assets take before they arrive at the bank.

    8) 💰 Huobi Founder Sells 100% Stake to Justin Sun’sAbout Capital - Huobi founder Leon Li will no longer be part of the business’ operations after the deal closes, with Sun taking on an advisory role.

    9) 💳 Google to Integrate Crypto Payments With Cloud Services From 2023 via Coinbase Partnership - Leading tech giant Google is set to integrate crypto payments into its cloud services following a new partnership with crypto exchange Coinbase.

    10) ⛏️ Grayscale Sets Up Entity to Invest in Bitcoin Mining Hardware- Grayscale Investments, the largest crypto asset manager, is setting up an entity seeking to buy Bitcoin mining equipment at distressed prices, in partnership with Foundry.

      💬 Tweet of the Week

      Bankless founder David Hoffman sues the U.S. Treasury Department over OFAC reporting requirements stemming from receiving small amounts of unsolicited Tornado Cash

      💵 Weekly Crypto Fundraises & Deals

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

      1. Tatum raises $41.5M for Blockchain Development Platform, led by Evolution Equity Partners.

      2. NXYZ raises $40 million for blockchain data infrastructure startup, led by Paradigm.

      3. Zerion, a web3 wallet, raises $12.3m led by Wintermute Ventures

      4. Blackbird, a Web3 hospitality platform, raised $11M in a seed round, co-led by Union Square Ventures, Shine Capital and Multicoin Capital

      5. MynaSwap, a trading and vaulting platform for collectibles, such as sneakers, sports cards and watches, raised $6M, led by Blizzard

      6. Xalts, building investment products, raised $6M, co-led by Citi Ventures

      7. Arch, a DeFi startup, raised raised $5M, co-led by Digital Currency Group and SoftBank spinoff Upload Ventures

      8. Suberra, a Web3 subscriptions and payments platform, raised $2.7M from over two funding rounds led by Spartan Capital, Delphi DigitalShare Coinstack

      📊 Key Stats of the Week

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

      1. MakerDAO Invest $500M in US Treasuries As DeFi Lending Rates Slump

      2 Celsius Had a Total of 603,497 Customers With the Total Holdings of $6,678,038,295

      3. 62% of Celsius User Accounts Were Under $500, and 468 Customers Had h Balances Over $1M

      4. Celsius Customers’ Most Popular Asset is BTC With 46% of All Holdings. ETH Is 21% and USDC Is 12%.

      5. Etherum L2s Optimism and Arbitrum Are Surpassing Avalanche in Daily Transactions

      Source: @dantwany

      6. MetaMask Passes 30 Million Monthly Active Users While Over $1 Trillion Annualized On-Chain ETH Transaction Volume Is Supported Through Infura’s Ethereum API

      Source: @TheBlockRes

      7. 44 Out of the Top 100 Public Firms Actively Using Blockchains for Business Applications

      Source: @TheBlockRes

      8. Q3 2022 Stats for the Polygon Ecosystem

      Source: @NarbTrading

      9. Top 15 PlayToEarn Projects by Active Users

      10. All-time Ethereum Bridge Volume Comes to $169 Billion

      🧵 Thread of the Week - ETH’s First Deflationary Week Deep Dive

      1/ On October 8th, there had been ~13k $ETH issued since the Merge.

      Today, the total amount of ETH emitted over the past 25 days is just ~9.6k. Roughly 27% of all newly issued ETH post-merge has been burned.

      The cause?

      $XEN

      2/ XEN is a free-to-mint token that rewards users with larger token allocations who agree to longer claim terms.

      On its October 8th launch, XEN consumed more than 40% of all L1 gas fees on Ethereum over a 3-hour period.

      3/ The amount of mintable tokens will decline over time.

      The XEN token contract has already consumed more than 2.8k ETH of gas fees in just 2 days.

      There are many users and bots agreeing to 1-day claim terms as they try to extract some profit by selling XEN.

      h/t @SixdegreeLab

      4/ With ~83% of the XEN token supply held by the top 100 wallets and just over $40k of liquidity on Uniswap, this is unlikely to end well for anyone purchasing the token.

      A free token minting contract will lead to extremely heavy sell pressure, as indicated by the XEN price.

      5/ More interesting than XEN is the effect one random free token mint has had on ETH supply flows.

      If we annualize the ETH burn over the past 24H, we arrive at a -0.57% inflation rate.

      Bull market block space demand could make ETH deeply deflationary.

      📝 Highlights from the Top Crypto Reports

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

      About the Author: Messari brings transparency to the crypto economy. Messari wants to help investors, regulators, and the public make sense of this revolutionary new asset class and build data tools to drive informed decision-making and investment. This is an excerpt from the full article, which you can find here.

      Primer on Avalanche

      The Avalanche network is a Proof-of-Stake (PoS) smart contract platform for decentralized applications. Avalanche differentiates itself by creating and implementing a new consensus family known as "Avalanche consensus." Following years of research, the Avalanche mainnet was launched in September 2020 and featured the release of a multichain framework utilizing three chains: the P, X, and C chains. Each chain plays a critical and unique role within the Avalanche ecosystem while providing the same capabilities of a single network, often called the Primary Network. Avalanche consensus and the Primary Network are designed to support sovereign, interconnected blockchains known as subnets. Subnets are subclasses of Primary Network validators that run the same Virtual Machines (VMs) with their own rules. Subnets enable different properties of reliability, efficiency, and data sovereignty. They provide the ability to create custom blockchains for different use cases while isolating high-traffic applications from congesting activity on the Primary Network.

      The Third Quarter Narrative

      Despite the widespread market decline during Q2, Avalanche focused on its vision to digitize all assets, enhance the network’s capabilities, and scale horizontally through architectural design and subnets. It improved user access with Core, a Web3 operating system. The ecosystem also continued to expand into DeFi and beyond with the rollout of NFT marketplaces like Trader Joe’s Joepegs and GameFi developments. Ultimately, it was a continuation of development for the Avalanche ecosystem, with the network maintaining its focus on the long term.

      Q3 lacked the quantitative excitement witnessed during last year’s bull market, but the bear has surfaced the network’s fundamental user base and ability to push forward with its go-to-market strategy. As a follow-up to the State of Avalanche Q2 2022 report, this report will dive into the quantitative performance over the quarter and the qualitative evidence that Avalanche is continuing to execute its vision. To that end, Avalanche’s mission toward adoption remains intact after a tumultuous Q2, with further integrations, expansions beyond DeFi, and advancements in network functionality.

      Network and Financial Overview

      The data used to evaluate the quantitative aspects of the Avalanche network are taken from the Primary Network and, more specifically, the Avalanche C-Chain.

      Subnet activity is also considered along with the C-Chain but not presented in data tables, seeing as each subnet has its own sovereign security, native tokens, and value accrual mechanisms. In contrast, the C-Chain is currently the primary value driver of AVAX.

      Similar to Q2, Avalanche C-Chain experienced declines in network usage and financial performance except for slight growth in circulating market cap (i.e., network value).

      While network value increased slightly (3.3%), usage and revenue generation dramatically declined. Average daily transactions declined by 65.5%, and with a welcomed 76.2% decline in transaction fees, total revenue declined by 94.1%. From a valuation perspective, the relationship between network value and revenue (price-to-sales (P/S) ratio) continued to reverse course, moving from 379x to 665x.

      Daily active addresses also continued to reverse course, with address activity averaging 38,000 per day, down from an average of 63,000 in Q2. Outside of the C-Chain, daily active addresses on the DeFi Kingdoms (DFK) and Crabada (Swimmer) subnets experienced an uptrend.

      The address activity on the DFK and Swimmer subnets reflects usage that would have been previously captured on the C-Chain. Nonetheless, the amount of address activity on the C-Chain is still four times greater than a year prior. The growth in activity on the subnets indicates healthy subnet functionality.

      🎧 Top Crypto Podcasts of The Week

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

      📈 Top Performers This Week

      Here are the top 15 performers in the last week from all tokens with a market cap of $20M+.

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      Here are the episodes we’ve released so far...

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      📚 How To Get Started With Crypto Learning

      📰 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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