https://en.cryptonomist.ch/2023/06/07/crypto-effects-fud-against-binance/

On 5 June, Binance and its affiliates were sued by the US Securities and Exchange Commission for committing 13 different offenses within their operations.

However, the SEC’s explanations, listed in a 136-page document, do not convince the crypto community, which has gathered on Twitter to defend its rights and fight the FUD (Fear, Uncertainty & Doubt) created by the US agency.

Tempers are running high and the issue is becoming increasingly sensitive.

Let’s delve into the matter together.

The SEC’s lawsuit and the effects of FUD against Binance

2 days ago cryptocurrency exchange Binance suffered a wave of FUD after the US SEC filed 13 formal charges in New York District Court suing Changpeng Zhao (CZ) and his company.

Initially, the news was not taken at all well by investors, who rushed to withdraw all the funds they held within the exchange, fearing that what happened in November 2022 with FTX might happen again.

Binance immediately denied all allegations, responding that it will vigorously defend itself in court against the SEC‘s slanders.

In any case, despite the fact that there were no factors pointed to the exchange’s liquidity problems and despite the fact that the exchange made its proof-of-reserves public, users preferred not to take a chance.

The result, according to Nansen’s data, was an asset outflow on Binance.com of $2.68 billion on the Ethereum chain and $3 billion overall multichain, in just 24 hours after the news broke. (netflow of $1.43 billion)

The rush of withdrawals from the exchange does not seem to have put a dent in the exchange, which enjoys $54 billion in assets held and can afford to deal with such situations.

At the time of writing, the situation seems to have stabilized on Binance.com while other capital leaks are happening right now on Binance.US on which the SEC has threatened an asset freeze.

Beyond the momentary scare that the news may have caused the crypto community, the fact remains that many users have suffered speculative losses.

In the 2 hours following the filing of the SEC’s lawsuit and the spread of FUD on social media, Bitcoin lost about 5% of its value, changing price patterns that had previously formed.

As a result, many traders were blindsided by the crypto asset’s crash, losing a lot of money.

One user in particular, with the nickname “Ash Crypto,” claimed on Twitter that he lost the equivalent of an entire Lambo, a sports car so beloved by crypto traders, because of Binance FUD.

Crypto community unites to fight FUD against Binance

The FUD against Binance was immediately halted the following day when the Securities and Exchange Commission chose another scapegoat to attack, namely Coinbase.

After the lawsuit against Binance, the SEC and its Chairman Gary Gensler have targeted the US exchange Coinbase, accusing it of violating certain registration laws.

Incredibly, the federal agency’s new attack did NOT create further turmoil in the market, instead helping to spread awareness among the crypto world of the injustices brought forth by the SEC.

How is it possible that the same commission granted Coinbase‘s IPO in 2021 when, according to recent allegations, it would not be a registered broker and would have been operating illegally on US soil since 2019?

This blatantly contradicts the SEC’s own claims that it is confusing investors.

The entire crypto community in response to the onslaught against Coinbase and the FUD against Binance has responded loudly by highlighting the federal agency’s double standards and obscurities.

In particular, Charles Hoskinson, founder of Cardano, expressed solidarity with Binance by explaining that the SEC’s moves are part of a strategy concocted to favor the future entry of CBDCs into the market, to the detriment of cryptocurrencies.

In fact, the SEC would like to hinder crypto progress in the US by avoiding any kind of collaboration with the country’s providers, and by fueling diatribes between proponents of libertarianism and those of authoritarianism.

CZ himself, CEO of Binance, has expressed doubts about the federal agency’s good faith in wanting to “protect” US investors.

The SEC’s move only sets the stage for a move away from the industry in the US, encouraging entry into the industry by players from other countries.

Changpeng Zhao wonders if indeed the SEC is protecting investors from danger from the markets or protecting itself and political interests of the powerful.

The situation reeks of rot.

A reflection on possible future scenarios

The issue of the FUD created against Binance and the recent allegations against Coinbase have only fortified the crypto community, which is now tired of the SEC’s bullying.

Opinions of distrust toward the US federal agency, which has now uncovered its cards highlighting political interests behind its activities, are spreading on Twitter.

The same SEC that years ago got “fooled” (or perhaps was also involved) by the biggest bluff in the history of finance by Berni Madoff is now bluffing its own public, spreading false and contradictory information to the investors it is supposed to protect.

The same agency that was unable to detect FTX’s fraudulent activities and anticipate the bankruns of Genesis, Voyager, and Blockfi is justifying its incompetence with a general attack on the cryptocurrency industry.

In any case, SEC or no SEC, it is evident how cryptocurrencies do not give a damn about US regulations and the opposition of proponents of authoritarianism.

Bitcoin in particular was created with the characteristic of being censorship-resistant and potentially usable anywhere in the world where there is an internet connection.

If the United States were to truly hinder the development of the industry by forcing exchange providers out of business, the entire industry would move elsewhere, without a shadow of a doubt.

The industry has reached such capitalization and importance that it can no longer be ignored, so there will always be someone ready to welcome it with open arms, supporting innovation and explicitly gaining from it.

In support of this argument, it is worth mentioning that despite the FUD created and the heavy accusations, Bitcoin has quickly recovered all the dumps of two days ago, returning to the $27,000 area.

Such a pronounced recovery only serves to illustrate Bitcoin’s resilience and indifference to politically motivated issues.

Beyond price action, which may be more or less bearish in the coming days, it is important to understand that reversals such as these imply a very specific meaning:

Bitcoin is here to stay. Crypto is here to stay.

https://en.cryptonomist.ch/2023/06/07/bitcoin-network-90-minutes-produce-block/

Yesterday, an anomaly occurred within the Bitcoin network: a block was produced 90 minutes after the previous block was validated.

In fact, the blockchain was idle for 90 minutes waiting for the resolution of block 793099, which was completed at 11:55 AM (CEST).

Furthermore, ever since that block, users’ tx fees have increased by quite a bit, making more money for the miners. 

What does all this entail for Bitcoin?

Let’s take a look at it together in this article

Bitcoin network: block validated 90 minutes late

Yesterday, there was an anomaly in the Bitcoin network regarding the validation process of a block by the miners.

Specifically, there was a 90-minute time discrepancy between the production of two separate blocks: 793098 and 793099.

Block 793098 was successfully added to Bitcoin’s distributed ledger at 10:25 AM (CEST), by the F2Pool mining pool.

In contrast, block 793099 was successfully validated at 11:55 AM (CEST) by ViaBTC.

Between 10:25 AM and 11:55 AM., the Bitcoin network obviously continued to function properly as usual (it did not crash), but did not produce any blocks.

This means to us that those who made a transaction after 10:25 AM had to wait until at least 11:55 AM before it was actually confirmed.

It is not yet clear why this system glitch occurred.

We know that on average the time to produce a block on Bitcoin is 10 minutes.

But nowhere is it written that this value has to be fixed every time.

It is merely a statistical average: sometimes it might take 30 minutes while other times as little as 1 minute

However, it remains rare to see two confirmed blocks 90 minutes apart.

The “difficulty adjustment” mechanism regulates exactly this process, increasing or decreasing the complexity of mining a block by miners according to the needs of the network.  

However, this changes only every 14 days, and yesterday its value remained unchanged.

The next Bitcoin adjustment is expected in 7 days.

The most plausible hypothesis is that a brief drop in hashrate caused difficulties in achieving adequate computing power to validate block 793099.

Indeed, if we look at the hashrate values in the time span from 10:00 AM to 11:00 AM yesterday, we see a decline in this data.

Specifically, at 08.00 UTC (i.e., from 10.00 AM CEST) this value recorded 543.33 EH/s while at 09.00 UTC (11.00 AM CEST) the hashrate dropped to 40.84 EH/s.

Most likely the sudden drop from network power created problems in reaching the appropriate Exa hash per second threshold to be able to resolve the offending block.

The “problem” was resolved in the next hour when the hash rate returned to normal values.

There is currently no relevant news to account for this momentary drop in network computing power. 

Tx fees on the rise on Bitcoin: miners say thank you

Another very interesting detail emerging from the anomaly that occurred yesterday on the Bitcoin network between the production of block 793098 and 793099 is an increase in the tx fees paid by users.

Each time a block is validated and added to the previous blockchain, the miner responsible for validation (or the mining pool behind it) earns a block reward of 6.25 BTC plus a variable transaction fee amount.

The block reward is halved every 4 years according to the halving logic, while the tx fees are highly variable block by block and depend on the competition among actors who want to execute transactions faster on the network.

In block 793098 (the one prior to the anomaly) F2Pool earned 6.25 + 0.33828524 BTC while in block 793099 ViaBTC received an impressive 6.25 + 0.94846536 BTC.

Considering the average fees paid per transaction in the two blocks, 0.00009345 in the first and 0.00030429 in the second, respectively, this is an increase of more than 300%.

This means that sending a transaction on the network before 10:25 AM cost on average about 2.34 euros while immediately afterwards it cost 7.63 euros.

If we then look at the subsequent blocks we even find that the AntPool mining pool mined a block receiving 1.15463641 BTC as a reward from transaction fees.

Rarely do we see such high fees.

The trend then continued in subsequent blocks up to the current ones, where tx fees decreased slightly, but remained higher than those recorded in block 793098. 

In practice, it appears that the 90 delay in the production of the alleged block 793099 triggered a rise in fees, which obviously translates into a gain for network miners.

Underneath this event could likely be the hand of users who are particularly active these days in the Ordinals protocol that allows for the creation of NFTs or BRC-20 tokens in the Bitcoin blockchain.

Although the FOMO of inscriptions has decreased a lot compared to the first week of May, the network’s tx fees continue to register medium to high values, especially in the last two days.

https://en.cryptonomist.ch/2023/06/06/coinbase-under-secs-crosshairs/

Breaking news: the SEC has also officially subpoenaed cryptocurrency exchange Coinbase in New York District Court.

A day after attacking Binance, here are new stances from the US federal agency that is doing everything it can to hinder the crypto market.

Let’s look at the details of the news together.

Coinbase and the charges by the SEC

New day, new lawsuit filed by the US Securities and Exchange Commission, this time against Coinbase, one of the industry’s most compliant cryptocurrency exchanges.

The US agency’s complaint was formally made in the US District Court for the Southern District of New York, in a document in which Coinbase was cited for violating “registration provisions.“

According to the charges, the exchange failed to fulfill certain obligations prescribed by the Securities Exchange Act of 1934 and the Securities Act of 1933.

In detail, the company headed by Brian Armstrong allegedly never registered its staking-as-a-service and offered investors sales of unauthorized securities that fall under the heading of security tokens.

Among them we can observe cryptocurrencies such as SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO.

A few tokens among those just listed were also reported in yesterday’s lawsuit filed by the SEC against Binance.

As a reminder, a security token refers to a financial product from which investors expect a financial return, linked primarily to the performance of the company that issues them.

These kinds of products must be mandatorily registered with US regulators and obtain the necessary approvals, which Coinbase and Binance have not done.

The director of the SEC’s Enforcement Division believes the charges were properly calculated, adding harsh words against Coinbase:

“You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: The consequences for the investing public are far too great.”

It now remains very interesting to watch how the crypto exchange will respond and whether it will indeed abandon the US market, as previously warned in case US federal regulators fail to cooperate.

Binance, Coinbase’s main competitor, has also announced that it will vigorously defend its position from the SEC’s bullying, but without referring to any shift in its operations.

The risk of overly restrictive regulation

The way the SEC is attacking Coinbase, and in general all exchanges and major cryptocurrencies in the industry, is quite ridiculous in every respect.

First, it is embarrassing how in 2023, multibillion-dollar companies operating in niche markets, highly specialized on the tech side, have to follow regulations dated 1930, without the possibility of any exemptions.

Second, many of the cryptocurrencies that the SEC cited as securities have existed for several years, and only today has the US agency been able to recognize them as such, allowing companies like Binance to base their core business precisely on trading these products. 

Ultimately, it is obvious that the implementation of such stringent regimes for crypto-exchanges are part of a well-conceived political move to make sure that the floodgates are opened for the future of a CBDC, which consists of none other than a centralized cryptocurrency under government control.

The constant accusations and posturing are unacceptable by the crypto industry, which now has to defend itself tooth and nail to assert its rights and make its arguments heard loud and clear.

If the SEC were to continue with this trend, it would risk ruining the US market from developing blockchain technologies related to the use of decentralized cryptocurrencies.

The whole thing could create serious damage to the country: most likely many crypto service providers will move to Europe, where less stifling regulations, such as the MiCA, are coming into effect.

In addition, competition from other continents could harm the technological development of the entire continent, which would fall light years behind and lose control of tech markets, benefiting Chinese rivals.

On the other hand, those who are likely to be unaffected, at least in the long run, are cryptocurrencies themselves, since they were born precisely with the intention of circumventing centralized strong powers.

Bitcoin in particular was popularized by Satoshi Nakamoto precisely with the characteristic of being resilient to censorship, and potentially usable under any conditions of adversity on the social and economic front.

Bitcoin, as well as crypto assets, represents freedom, and the time has come to protect these values.

https://en.cryptonomist.ch/2023/06/06/bitcoin-future-value-forecasting/

In this article we try to take a local mind and analyze the general situation in the crypto market to understand what are the most likely scenarios and forecasting about Bitcoin’s future value.

Yesterday, the industry’s leading cryptocurrency was challenged by the news regarding the SEC’s lawsuit against Binance: what is going to happen?

Let’s take a look at it below.

Bitcoin’s future value forecasting after the SEC’s lawsuit against Binance

At this very moment, making predictions about the value of Bitcoin is really difficult, especially after the heavy news that broke yesterday afternoon, shaking the balance of the market

The US “Securities and Exchange Commission” (SEC) has filed a civil lawsuit against Binance companies and its CEO Changpeng Zhao citing 13 different allegations.

Specifically, the US agency alleges that Binance offered investors sales of unregistered securities such as BUSD and BNB, while also highlighting a wide range of tokens that fall under the category of “security.”

In addition, according to the charges filed, the exchange is allegedly guilty of pumping up trading volumes over the past two years by mixing users’ assets with those managed by CZ and other affiliates in a totally illegal manner.

Binance and its founder immediately denied this, saying they will “vigorously defend their platform.”

The news immediately had negative repercussions on the crypto market, causing Bitcoin’s price to stumble below $26,000 and endangering the price structure.

Although Bitcoin is not correlated in any way with Binance, it is clear that news about the world’s largest exchange in terms of volume impacts the value of the cryptocurrency in no small way.

In any case, as much as the news may have shaken investors, the SEC‘s battle against the crypto industry has been known for some time, as has the agency’s willingness to introduce a CBDC dissemination program into its agenda.

Coinbase was also recently attacked by the commission and its chairman Gary Gensler, but without culminating in doomsday scenarios.

Bitcoin may have difficulty regaining a bullish structure in the coming weeks, but it is not in serious danger.

Even Binance does not seem to have been heavily affected, registering a sizable but not particularly worrisome volume outflow.

What seems most evident is the attempt by the powers that be to uproot a world that has already made its bones for years and is now ready to respond with a knife between its teeth.

However things go, Bitcoin will hang on with or without the SEC’s charges and with or without Binance.

Short- and medium-term forecasting for Bitcoin’s value: 20K coming soon?

The SEC’s charges came with impeccable timing, hitting the crypto market in a weakened situation and changing the short-term forecasting of Bitcoin’s value.

While until recently we could most probably expect an upward rebound in the crypto asset, especially if the Fed (as expected) would not raise interest rates for this month, the scenario has now changed.

The short-term structure is blatantly bearish with all indicators trending short: the first support zone is the $23-25,000 level and the next one is around the psychological threshold of $20,000.

A break of the latter level, although still unlikely, could result in a prolonged continuation of the bear market, at least until the end of the summer.

Unfortunately, the data on the derivatives markets are not comforting: with open interest high compared to the data of recent months, there have been numerous liquidations of long positions.

Despite the fact that many traders positioned themselves with the view of a bullish return in the short term, things have gone the other way, causing a long squeeze and a chain of liquidations in the last 24 hours.

However, although the odds in the short term play in favor of a downturn, in the medium term things have not changed at all.

Macroeconomic data speak of a possible recovery in the economic situation by the end of the year or early 2024 at the latest, with a mildly recovering US labor market and the prospect of the end of quantitative easing.

Bitcoin’s cyclicality, which has worked through 3 different market cycles so far, indicates to us that 2024 could be the right year for a bullish market return.

Meanwhile, data on Bitcoin’s network continues to improve, with an increase in active addresses and computational strength of the network.

Likewise, developments related to new technologies such as the Lightning Network and inscriptions protocols are positive.

In this sense, Bitcoin, by analyzing the macro situation and on-chain data, in common agreement with the MVRV Z-Score technical indicator indicating the “fair value” of the asset, could be highly undervalued at the moment.

Arthur Hayes’ analysis of Bitcoin

Arthur Hayes, a very famous crypto trader, published his own study a few days ago in which he talked about predicting the future value of Bitcoin.

The trader, reported to be the youngest African American crypto billionaire in history, is particularly bullish on Bitcoin’s situation.

Although his analysis came before the SEC’s announcement that it will fight Binance’s empire, this changes nothing.

According to Arthur Hayes, this summer will see the bottom in terms of the US Federal Reserve raising interest rates, resulting in the beginning of a market recovery.

In addition, the US debt crisis could favor assets that serve as a store of value such as gold and Bitcoin, increasing their preciousness and market price.

The stagnation of trading volumes on crypto trading platforms would only be a temporary situation, and we could see a return of a bull market soon.

In particular, the crypto billionaire believes that Bitcoin could resume its bullish structure between Q3 and Q4 2023, hence between late summer and early fall, in line with likely changes in US monetary policies.

In his view, Bitcoin will never again return below $20,000, but may only approach down there.

If so, this could be a great time to accumulate satoshis, especially now that retail and small investors, scared to death by the SEC‘s bullying, are liquidating their positions in the market.

As the good old Baron Nathan Rothschild used to say, “The time to buy is when there’s blood in the streets.”

https://en.cryptonomist.ch/2023/06/05/crypto-twists-turns-ceo-terra-luna/

Breaking news: the former CEO of the Terra (LUNA) crypto project is free again, obtaining bail in Podgorica for the umpteenth time.

A few days ago, prosecutors in Montenegro had filed an appeal with the court requesting the denial of remand measures for Do Kwon, now considered an international criminal

Let’s look at the details of the news together

Do Kwon, former CEO of crypto project Terra (LUNA), is free again

The legal adventures of Do Kwon continue, him being the founder and former CEO of the Terra project and crypto LUNA, accused of a multitude of financial crimes.

Initially, after the South Korean was arrested along with his trusty Han Chong-Joon in Podgorica for possession of false documents, he was jailed until new sentences were passed.

Immediately thereafter, the two were released on bail of 400,000 euros each, with the requirement that they be held under house arrest, which, however, was immediately challenged by an appeal filed by some prosecutors in Montenegro.

Thus, after voiding the decision to release on remand the duo responsible for the crash of the crypto Terra Luna ecosystem, here is a counter-cancellation coming from an official statement from the Podgorica Basic Court.

The latter accepted the bail terms set at the beginning of the matter on 12 May, with both defendants required not to leave their residence in Montenegro.

The two remain under observation by police authorities, awaiting careful examination of the documents (believed to be forged in the first instance) with which they were trying to board an international flight to Podgorica.

Kwon and Chang-Joon were also required to provide certain personal and financial data, among which bank statements, a sales contract for the purchase of an apartment, and an invoice for the purchase of a vehicle emerged.

Should Do Kwon‘s documents be found to be forged once and for all, he would face a five-year prison sentence in the Balkan country.

The two South Korean cybercriminals will return to court to defend themselves on 16 June. In the meantime, the prosecution may file yet another appeal within three days against the courts’ latest decision to accept house arrest bail.

South Korean authorities want to extradite the co-founder of Terraform Labs in connection with the investigation into the infamous collapse of the Terra ecosystem, which wiped out around $40 billion from the cryptocurrency market in June 2022.

Interpol has also issued a red notice for Kwon in connection with charges in South Korea, while he also faces a number of fraud charges in the United States.

Do Kwon’s troubles may not be over

Although Do Kwon, former CEO of the Terra Luna crypto project, and his business partner may easily escape the danger of imprisonment in Montenegro, there remains a greater danger from their home country and the United States.

In fact, the US and South Korea have the two individuals in their sights and are just waiting for the right time to proceed with an extradition.

It should be recalled that the founder of Terraform Labs is believed to be primarily responsible for the collapse of the Terra ecosystem, which took about $40 billion out of the crypto market last year.

Interpol also had issued a “red notice” against him making him for all intents and purposes an internationally wanted criminal.

To date there are eight charges against Do Kwon between the United States, South Korea, and Montenegro, including those of fraud, computer fraud, and falsification of documents.

Hence the issue of legal disputes in Podgorica may be insignificant compared to what really awaits the South Korean outside the country of Montenegro.

The whole world has its eyes on him and a host of investors are just waiting to enjoy seeing him incarcerated for life in a Seoul or New York prison.

However, the question still remains as to why all this hounding of “poor” Do Kwon and the total absence, on the opposite side, of investigative activity regarding the money taken away from the Terra Luna crash.

After all, markets are a zero-sum game: if someone lost $40 billion, someone else undoubtedly gained it.

Hence, if these assets are not in Do Kwon’s pocket, where did they go? And why are no authorities investigating this?

Some rumors say that the real perpetrators, and not just those on the legal front (Do Kwon) are Sam Bankman Fried, Zu Shu, and Justin Sun.

Sadly though, few care.

Price analysis of the crypto Terra (LUNA).

The crypto Terra (LUNA) now seems to be on the verge of total decadence.

The new ecosystem born out of the fork of the old LUNA token (now called LUNC) seems to be nowhere near able to compete with the big boys in the industry such as Ethereum, Arbitrum, Polygon, Solana and Optimism.

The latter enjoy a significantly higher TVL and a significantly more thriving user and developer base.

In particular, the chain has a capital turnover of only $10 million, with almost all operations conducted on the Astroport DEX and a lack of alternative dApps.

The Luna crypto is obviously suffering from this situation and cannot get out of the abyss zone even on the purely speculative front.

Apart from a few brief recovery situations, culminating in a subsequent depreciation of the asset, Luna is in the midst of a long-term bearish trend.

Just yesterday there was an attempt at manipulation by some whale that ended in the last few hours with a dump that wiped out earlier gains.

The RSI does not seem to be helping either, and on occasions when the indicator marked oversold levels (8 May) we have not seen price reversals, only a prolongation of laterality/distribution.

Luna at this time trades at $0.86 per piece, with a market capitalization of $245 million and volume in the last 24 hours exceeding $250 million.

Given the still high market cap and the absence of a true DeFi world around Luna, it is very likely that the asset will continue to depreciate, even if the general bull market returns.

https://en.cryptonomist.ch/2023/06/05/crypto-influencer-collects-1-5-million/

The world of cryptocurrencies seems to amaze us every day with events out of the ordinary: these days crypto influencer Pauly0x has raised nearly $1.5 million from his own community by promising literally nothing in return.

Strange but true, there is no evidence of “marketing thinking” on the part of the influencer: from his own address there are tens of thousands of transactions confirmed by his Twitter followers.

Full details below.

Crypto influencer Pauly0x raises $1.5 million from crypto domain “yougetnothing.eth”

PaulyOx, founder of “NotLarvaLabs” and well-known crypto influencer with a following of 85 thousand followers on Twitter, has been the protagonist of a surreal story these days.

The individual, famous in crypto circles for “shilling” the PEPE crypto just two days after the token was deployed, about a week ago purchased the crypto domain “yougetnothing.eth.”

He then invited his community to send him ETH and other cryptocurrencies, promising literally nothing in return.

In just 4 minutes about $70 in ETH was sent to the address, and just after two days here is the boom: the wallet had over $1 million in balance.

It is still unclear why all this success is happening: probably many expected some sort of airdrop-style reward from Pauly0x while other users simply thanked the individual with a freebie.

In fact, the crypto influencer has made a ton of money for his community (at least for those who followed his lead) thanks to the immense growth in the price of PEPE since mid-April.

On the other hand, simple respect and admiration cannot justify such a large amount of donations. 

It is likely that many of his followers thought that by sending ETH to the address “yougetnothing.eth” they would receive a gift of a new token called NOTHING.

This can be inferred from some of Pauly0x’s provocative tweets referring to alleged snapshots, typical of the world of airdrop rewards.

The intertwining of words about the word “NOTHING” is driving the degens of the crypto world crazy, who still cannot understand whether by sending funds to the address in question they will receive nothing or actually receive a token named “nothing.”

The crypto influencers’ sympathetic idea continued to attract attention when he himself opened live Twitter feeds called “NOTHING” in which simply nothing was said or done: total silence.

Finally, a few hours ago here is another shrink-like action by pauly0x who posted the address of the website yougetnothing.com, where there is a “claim” button and the amount of the counter value of the assets held in his wallet.

Infine, poche ore fa ecco un’altra azione in stile strizzacervelli di pauly0x che ha pubblicato l’indirizzo del sito web yougetnothing.com, in cui è presente un bottone “claim” e l’ammontare del controvalore degli asset detenuti nel suo wallet.

The dig at Ben Armstrong aka Bitboy

The issue of the “yougetnothing.eth” domain and the request for funds by crypto influencer pauly0x may turn out to be simply a mockery of Ben Armostrong, aka Bitboy.

Indeed, Bitboy, a Twitter influencer with 1 million followers, recently caused a scandal by raising more than $20 million to fund 3 memecoin projects.

Specifically, Armstrong had the community send him money through the crypto domain “ben.eth” from which he later broke away by immediately distancing himself. In fact, the domain belongs to another individual who allegedly worked together with Bitboy to develop two memecoins and a DEX.

The matter was taken badly by many users who insulted the influecers by calling him a scammer.

It is at the very least ridiculous that until a few days he himself was shouting loudly urging his followers to fund the domain “ben.eth” and a few days later he turned around and withdrew from any kind of collaboration.

In this sense Pauly0x may have intended his tease regarding the “yougetnothing.eth” domain in a joking manner by implying that those who send crypto to the address will receive nothing at all in the true sense of the word, just as Ben Armstrong did.

The issue still remains very complex to analyze: if it were only a joke and a dig at Bitboy, why delude one’s audience with supposed snapshots or websites where to make the airdrop claim?

It could simply be a mega troll, from which the influencer made a considerable amount of money.

Specifically, in the address “yougetnothing.eth” there are currently 781.3 ETH and other tokens such as USDT and PEPE, with a total value of $1.47 million.

Joke or not, the subject from this story has earned a million-dollar fortune from it.

We will see in the near future whether the supervisors of markets and crimes related to financial activities will intervene in this context by issuing sanctions for pauly0x and Bitboy.

https://en.cryptonomist.ch/2023/06/05/elon-musk-manipulates-price-dogecoin/

Bad news for Elon Musk who has new charges of insider trading against him for manipulating the price of the cryptocurrency Dogecoin in a series of events from 2021 to the present.

All the support shown toward Dogecoin on Twitter may have been part of a move engineered on purpose by the Tesla CEO, who now faces legal consequences for pumping up the crypto’s price.

Full details in the news below.

Elon Musk and new market manipulation charges involving Dogecoin

Here we go again: Elon Musk has been charged for the third time with insider trading for artificially manipulating the price of Dogecoin through a series of actions mainly involving tweets praising the crypto market’s first memecoin.

Second, Musk allegedly exploited other “publicity stunts” such as appearing on “Saturday Night Live” in 2021 and promoting on social media by some influencers to profit from Dogecoin trading.

The charges were filed on 31 May in Manhattan federal court by a group of crypto investors who, following and amending an earlier $258 billion class action lawsuit from June 2022, filed new charges against Tesla‘s CEO.

As per the letter filed with the court, the stakeholder allegedly engaged in a “deliberate carnivalesque course of barking, market manipulation and insider trading.”

Specifically what is being disputed against Musk is the legality of Musk’s choice to replace Twitter’s bird logo for a few days with that of Dogecoin, depicting the well-known Shiba Inu dog.

Indeed, after that event, it was discovered that the second richest man in the world allegedly sold from his personal wallet, bags of Dogecoin amounting to $124 million.

Musk’s lawyers, with regard to the June 2022 lawsuit (the second) had defended by stating:

“There is nothing unlawful about tweeting words of support for, or funny pictures about, a legitimate cryptocurrency that continues to hold a market cap of nearly $10 billion.”

However, in the new document filed in Manhattan there is a dispute of this old claim, which according to the group of investors harmed by market manipulation, is no longer credible.

The ball is now in the hands of US District Judge Alvin Hellerstein, who, as anticipated, will most likely accept the “amended compliant” i.e., the modification of the previous charge, adding that the defendants will not have to serve prejudice.

Elon Musk is paying dearly for his sympathy toward Dogecoin

Hence, Elon Musk once again finds himself in the spotlight for illegally contributing to the rise in the price of Dogecoin, on which he obviously profited from trading.

The news comes as no surprise at all to most, who noticed the ambiguity with which Musk had dealt with the memecoin.

In the sights of investors suing Tesla’s CEO is a particular emphasis on the instance in which Musk allegedly placed the Dogecoin logo on the Twitter home page.

That choice, which in Musk’s defense would be part of a “gesture of sympathy,” allegedly drove the price of $DOGE up more than 22% in just one hour of trading on the market.

In the following hours and days, the crypto went through a distribution phase that basically nullified all the previous pump, a typical scenario of market manipulation.

In the lawsuit filed in Manhattan, on-chain transactions and the address that allegedly belonged to Musk are mentioned, demonstrating the multibillionaire’s impeccable timing in dumping his positions in the very aftermath of the crypto’s pump.

This time Elon could really pay dearly for his actions if only the judge challenges him on the “fun and sympathy” aspect.

Investors involved in the case state that:

“Musk’s pretense that promotion of Dogecoin was just well-meaning fun—not meant to be taken seriously—is not credible.”

To be honest, I do not think any of us ever believed that there was no ulterior motive behind Musk’s exploits, given and considering that his Twitter profile has more than 140 mln followers.

We will see in the coming months how the judicial events of the case will follow. 

Focus on the price of Dogecoin

The DOGE cryptocurrency represents the first memecoin by market capitalization with a total value of more than $10 billion.

Currently, the crypto’s price is $0.0717 with a volume in the last 24 hours of $165 million.

Analyzing the chart of Elon Musk’s favorite dog we can see how the price is now crushing the 60-period moving average on a daily time frame, yet remaining above the $0.065 support.

Very interestingly, every sudden pump in price, in addition to always having Musk’s hand in it, has been followed by a rapid decline.

This, as mentioned earlier, is typical of scenarios in which one or more whales manipulate the price of an asset through social influence techniques.

DOGE currently has a drawdown from the all-time highs recorded in May 2021 of more than 90%.

It is not easy to get an idea of the future price direction for this cryptocurrency: too many variables are in the way, such as Musk’s influence and the SEC affair that considers Dogecoin a security.

What is certain is that in times of insecurity and market instability, investors prefer to stay away from more speculative assets like DOGE. 

On the other hand, the memecoin trend was revived a few weeks ago thanks to the appearance and appreciation of the crypto PEPE; which quickly won the sympathy of the degens of the crypto world.

All this only fortifies this asset class, which, while it remains lacking in fundamental characters, cannot be ignored.

Most likely, when markets return to more liquidity and noteworthy trading volumes, memecoins like DOGE will also return to their appreciation phase.

https://en.cryptonomist.ch/2023/06/04/binance-report-brc-20-tokens/

A few days ago, Binance published a study by its research team regarding the rising trend of BRC-20 tokens belonging to the Bitcoin ecosystem.

The standard, introduced by the Ordinals protocol, enables the creation of fungible tokens on the blockchain, raising the potential of the technology and making more money for miners.

Let’s try to summarize what Binance published.

Binance Research and the BRC-20 token study

Binance’s research team conducted a study on the emergence of BRC-20 tokens, highlighting the positive and negative factors of the new trend.

Although this new standard introduces the possibility of generating fungible tokens on Bitcoin’s blockchain for the first time in history, it also generates discordant opinions on the long-term sustainability and increasing chain fees.

First things first, let’s try to summarize in a few words what are BRC-20 tokens and how they have arrived in the Bitcoin ecosystem.

In early 2023, the rapid success of the Ordinals protocol, which introduced the possibility of generating NFT-like digital artifacts through the inscription of data on individual satoshi (minimal part of the BTC coin) inspired a Twitter user to propose a version of fungibility in the network.

Hence, BRC-20 is an experimental standard that allows users to generate fungible tokens within Bitcoin, somewhat like what happens in the Ethereum blockchain.

However, the latter was born precisely with the intention of providing an operational framework (ERC-20) for developers in the creation and management of cryptographic tokens backed by the network’s distributed digital ledger.

In the case of Bitcoin, BRC-20s do not enjoy all the features found in Ethereum, but they at least have the distinction of living on top of the world’s most decentralized and popular network.

The Bitcoin brand has influenced the success of the experiment, which currently enjoys a market capitalization of $475 million, although it had reached the $1 billion mark a few weeks ago.

It is worth pointing out that BRC-20 tokens are extremely risky and at a very early stage of development. 

The creators themselves have been explicit about the risks of their experimental nature. 

For now, beyond speculative interest in this type of market, there is no element of innovation that is not present in other compatible EVM networks or on Ethereum itself.

The three functions of the BRC-20 tokens

Let’s turn to an examination of the functions related to the creation of a BRC-20 token, made explicit by Binance’s research.

As mentioned, the creation of a fungible token within the Bitcoin blockchain is based on the process of inscription (hence the name “inscriptions”) of data on individual satoshis, or rather packets containing a certain amount of satoshis.

In fact, while the inscription of data on a SINGLE sat results in a non-fungible product similar to an NFT in view of the uniqueness of the essence of that unit of value, the transfer of data on packets of sats allows for the conceptual generation of a series of fungible tokens with the same characteristics in common.

These characteristics refer trivially to 3 factors, which are then those that each user must decide for himself or herself when creating a BRC-20 token: 

1. the name of the token;
2. the supply of the token;
3. rules on the minting limit.

The 3 factors are made explicit on the Bitcoin blockchain through 3 different operations, namely deployment, minting and transfer, as shown in the following picture.

The example in the photo captures the first ever experiment of BRC-20 token called with the ticker “ordi“.

This token has a supply of 21 million and a minting limit of 1,000 units at a time.

This means that a user, while being able to then sell an arbitrary amount of ordi tokens in the market, can generate a maximum of 1000 ordi at a time, until the maximum threshold of 21 million is reached.

There are several platforms where a BRC-20 token can be generated and a supply and demand matching point created. 

The main ones are ordinalswallet.com and unisat.io.

Both have incorporated a non-custodial wallet that allows performing the 3 functions just introduced, however Unisat is more professional and appropriate in this context.

In order to fund any of these two wallets and create one’s own BRC-20 token, it is necessary to make a BTC transfer from a wallet that supports the Taproot upgrade.

According to Binance, the advent of BRC-20 tokens benefits Bitcoin miners

Binance’s research team expressed an all-too-positive opinion about the advent of BRC-20 tokens although they highlighted concerns about long-term sustainability.

In particular, the trend has benefited Bitcoin miners who have received higher than usual fees from user TXs.

It is worth recalling that miners’ revenue is derived from two sources: block reward, currently at 6.25 Bitcoin per block, and user fees on every executed transaction.

Since the block reward is subject to halving every 4 years, according to the logic of the halving mechanism, rewarding miners with higher transaction fees than the norm supports and benefits their operations.

They represent the most important players in the Bitcoin ecosystem, being the ones who secure the network from cyber attacks through the computing power generated.

With the successful expansion of BRC-20 tokens, miners have been pleasantly surprised by the increase in the number of transactions on the network, which has boosted their earnings by about 10%.

However, although the issue of the BRC-20 experiment creates more viable conditions for miners, it at the same time generates discontent on the user experience side.

In fact, during the explosion of this trend, many individuals experienced higher than usual transaction execution fees and confirmation wait times.

A few days ago, there were more than 400,000 transactions in Bitcoin’s mempool waiting to be confirmed and added to a block

On-chain analytics firm Glassnode pointed to a spike for the demand of “blockspace” that is highly correlated to the use of the Ordinals protocol for the generation and exchange of fungible BRC-20 tokens.

We will see if a balance can be struck between these two opposing poles, or if developments in the Lightning Network will finally put a patch on these minor problems.

https://en.cryptonomist.ch/2023/06/04/crypto-winklevoss-gemini-danger/

These days the crypto exchange Gemini, owned by the Winklevoss twins, has been challenged by the market situation.

The company has been forced to cut some of its staff after volumes on the platform dropped dramatically, all the while facing some tough regulatory challenges. 

Let’s try to take a closer look at the matter.

The crypto exchange of the Winklevoss brothers fires 50% of staff during bear market

Gemini, a well-known crypto exchange run by the Winklevoss twin brothers, is facing a turbulent period that threatens to bring the company’s finances to their knees.

The Winklevoss brothers, who back in 2011 sued Facebook for intellectual property infringement earning a $65 million settlement, now risk shutting down their cryptocurrency exchange company.

With the prolonged decline in market prices and volumes on exchanges at multi-year lows, Gemini is no longer profitable and has been forced to lay off some staff to stay afloat.

In particular, about 500 employees have been cut off since the bear market began, half from a peak of nearly 1,000 in 2021.

This includes some Gemini executives such as the chief operating officer and the co-head of the exchange’s NFT platform.

Decisions about cutting personnel costs in half were made by Pravit Tiwana, a former Amazon Web Services executive hired as chief technology officer in January 2022.

According to Kaiko‘s data, volumes generated by Gemini from January to April this year were down 46% from those recorded during the September-December period of 2022.  

In the last 24 hours, the Winklevoss exchange generated volumes in the spot market of $23 million, which is extremely lower than market leaders such as Binance and Coinbase that produced trades of $7.3 billion and $976 million, respectively.

In total, Gemini’s market share in April amounted to 0.12% of global spot volume, a figure up from 0.07% in February 2022, but down 50% from a year ago.

Eswar Prasad, professor at Cornell University, said the following about the exchange‘s situation:

“its small market share and series of regulatory problems portend a bleak future for Gemini.”

SEC lawsuit against the Winklevosses’ crypto exchange

Weighing down the financial situation of crypto exchange Gemini and the Winklevoss brothers is the US Securities and Exchange Commission (SEC), which in January filed a lawsuit against the exchange and its affiliate Genesis Global Capital, a now-bankrupt crypto lender.

The allegation speaks of an alleged sale of unregistered securities through the “earn” product offered by the Winklevoss brothers, who are now seeking to defend themselves by asking for the case to be dismissed, calling the SEC’s action “ill-conceived.”

Regulators are seeking a settlement including “permanent injunctive relief, restitution of ill-gotten gains plus prejudgment interest and civil penalties.”

The bankruptcy of Genesis, which was penalized by the exposure of its assets on FTX and Three Arrows Capital, has led to a lowering of investor confidence on all services led by Gemini, resulting in decreased volumes and market share.

In addition, legal complaints and class actions are pending against Gemini Earn for leading to the loss of all funds of users who had deposited cryptocurrencies on the platform.

In total, nearly 300 users have joined a class action organized together with Genesis’ creditors on the social media platform Telegram.

To atone for all these problems and to find new markets abroad, especially in what concerns the derivatives trading sector in crypto, where Gemini is almost still absent, the Winklevoss brothers have talked about a second headquarters in Dublin. 

Cameron has said publicly that he and his twin will not leave the United States but will try to build a European market for Gemini in parallel, with the goal of reviving the company’s finances.

Will Gemini be able to survive?

At first glance, the Gemini crypto exchange does not appear to be exactly on the verge of bankruptcy given the economic capacity that is in the hands of the Winklevoss brothers.

The twins made a billion-dollar fortune by investing profits from the Facebook lawsuit in Bitcoin in 2011.

Regarding the issue of Gemini’s financial difficulties, the Winklevosses decided to invest $100 million from their own pockets to cover some of the company’s operating expenses.

Some rumors spoke of seeking foreign funding for the exchange, although the twins’ lawyer Charles Harder clarified that the company never intended to seek foreign funding. 

He also told Bloomberg that there are no material documents such as a pitch deck and term sheet that would confirm the rumours.

Instead, what seems to be verified is that JPMorgan has abandoned its relationship with Gemini, urging the exchange to find another banking partner since the business has stopped being profitable.

This further fuels investors’ fears about a future for the historic Gemini exchange, which is becoming increasingly uncertain.

In fact, the brothers could stop funding Gemini should it turn a loss again in the next quarter.

According to Campbell Harvey, professor of finance at Duke University and author of the book “DeFi and the Future of Finance,” the issue could be resolved by a takeover by a larger player in the industry.

These are his words, hinting at a possible presence of exchanges such as Binance, Coinbase or Kraken

“The Winklevoss twins have a strong brand. You can imagine possible mergers.”

However, Gemini’s legal problems with the SEC could make a takeover by a competitor problematic.

In the meantime, the exchange is trying to grit its teeth and hoping for a bullish market recovery for the cryptocurrency sector, which would surely lead to increased volumes in the markets and a return of profitability for the company.

We remain on our toes to monitor Gemini’s performance and assess the next decisions to be made by the Winklevoss twins.

https://en.cryptonomist.ch/2023/06/03/best-analysis-tools-crypto-airdrops/

In this article, we take a look at the best analytics tools to search for the next crypto airdrop and check the eligibility of your address.

You may not always be able to keep up with the many projects that release tokens as gifts to your community every day, but using these platforms will make the game a lot easier.

Full details below.

Find the next crypto airdrop: the best platforms for doing on-chain analysis

The world of airdrops is so vast that it is impossible to cover specific strategies for every crypto project that is intent on releasing tokens to the community. 

However, through these analytics tools you will be able to stay on the ball at all times.

Before introducing these platforms, it is worth mentioning that most of the airdrop strategies you will find within them refer to cases where the potential profits are low, but at the same time getting them is a piece of cake.

As for the most important airdrops, with assumptions of profits above $1000 per wallet, you can stay connected with this column and follow all the steps that will be listed on the specific projects, like what was done previously for Starknet, LayerZero and zkSync.

Here are 3 analytics platforms to make sure you don’t miss a single airdrop, and turn this crypto niche into a full-fledged professional income earner.

• DappRadar: on this on-chain analytics platform, where you can also keep track of your cryptocurrency trades and assets, there is a section dedicated to airdrops.

To earn a share of the prize put up for grabs by each project, simply follow DappRadar’s directions and hope to be selected.

The only downside: the process is not fully decentralized and you will need an email connection

• Ico Marks: similar to DappRadar’s airdrop section, on Ico Marks there is a long list of projects that have announced rewards to the relevant communities, with a step-by-step guide to try to get them.

In most cases it is sufficient to have a non-custodial wallet, a Twitter profile and a discord profile, while at other times it is necessary to have a presence on multiple social media or web3 applications.

Either way, the criteria are clearly explained on the platform with indications of airdrop expiration dates and expected reward.

• Airdrop Alert: On this website there is a section dedicated exclusively to the airdrop sector, with insights on projects that reward early adopters in the DeFi and NFT niches.

Similarly to the other two platforms, we can find all the info on airdrops that are scheduled, with data on the steps to take to get them.

Airdrop Alert seems more professional than Dapp Radar and Ico Marks, with a special focus on testnets and GameFi.

How to verify the eligibility of one’s address for a crypto airdrop

In addition to using analytics platforms to do airdrop research, a good “hunter” must necessarily be able to monitor the eligibility of one’s addresses in order to redeem long-awaited earnings.

Many users work hard to research promising projects and airdrops and then forget or fail to notice that they have been selected as “winners.”

This unfortunately happens when multiple airdrop strategies are followed simultaneously without being able to keep track of everything.

In this regard, there are two platforms that you can consult whenever you want to check whether you have received an airdrop, namely “Earndrop.io” and “Earni.fi“

Both work the same way: there is a search box where you have to enter your own address(es) and check if there is any airdrop pending.

According to Earni.fi, on average the platform helps each user track down airdrops amounting to $796.

In any case, both tools are valid and it makes no difference to use one rather than the other.

If your address turns out to be eligible for one or more airdrops, the platform will notify you immediately. 

You can even receive email notifications by associating your wallet, without having to be manually checking each time.

There are also paid pro versions of these two platforms that allow you to follow strategies proposed directly by Earni.fi and Earndrop.io and receive notification emails for multiple accounts at once.

In addition, the paid versions alert you precisely about the name of the protocols on which you may have been selected for airdrop.

The free plans only allow you to see that there is a protocol (without telling you the name) that is paying you. 

In any case, if you are an active airdrop user, you should have no problem recognizing the project in question, hence paid plans are only recommended for those who do this for work every day.

Analysis of the most promising crypto airdrops of the moment

In the last instance, let’s do an analysis of all the most promising airdrops of the moment, making a review of the projects that are most likely to earn tokens for their community.

In first place we find ZkSync, a layer 2 scaling solution for the Ethereum blockchain that can offer fast transactions and low gas fees.

The project has raised $458 million in funding from companies such as a16z, Coinbase Ventures, the Ethereum Foundation, Blockchain capital, Dragonfly, etc.

Most likely the Layer 2 based roll-up technology will reward its early adopters who will carry out operations on the chain with a +1000 airdrop

Second is LayerZero, an on-chain interoperability protocol that aims to solve the problem of security and chain incompatibility among different bridges in the Web3 landscape.

This project has reached a valuation of $3 billion, having been funded by Sequoia Capital, Tiger Global, Dapper Labs, a16z, Coinbase Ventures, Uniswap Labs, etc.

Participating in an airdrop is very simple and all one has to do is interact with some bridges, such as the one at Stargate and create volumes in on-chain transfers where LayerZero’s technology is present. 

Here as well, expectations are for an airdrop of the counter value of more than $1,000, at the very least!

 Finally, we find Starknet, Ethereum’s Layer 2 that uses off-chain STARK (Scalable, Transparent Argument of Knowledge) cryptographic computation proofs to enable large file processing.

Starknet has raised about $282 million in funding and an overall (crazy) valuation of $8 billion.

The approach to achieving airdrop is similar to that mentioned in previous projects: essentially perform mainnet operations, transfer assets from Ethereum to Starknet, and participate in Stargate protocol governance votes.

Additional projects that could make their users happy with the announcement of an upcoming airdrop are: Scroll, Base, Debank, MetaMask, Fuel and Mantle.

Stay tuned to this weekly column for all the updates and operational strategies you need to undertake to succeed in the wonderful world of airdrops.

Stay on top of it!

https://en.cryptonomist.ch/2023/06/03/most-used-dapp-platforms-web3/

The world of Web3 hosts a multitude of decentralized platforms that users can interact with, known by the abbreviation dApps.

These differ from one another based on the purpose for which they were developed, the number of active users, the total value locked within smart contracts, and the profits they generate from users’ transaction fees.

Let’s see in this article which dApps are the best known and most profitable.

The dApp platforms most used by DeFi users

Among the most widely used platforms in the DeFi world are dApps that serve as decentralized exchanges (DEX), credit/debt marketplaces, so-called CDPs (collateralized debt positions) used to mint stablecoins, and liquid staking applications.

In the coming years, new use cases will most likely emerge in the world of decentralized finance and consequently, there will be dApps with different mechanisms from those we know today.

In any case, for now those we have just mentioned represent the categories with which users interact the most.

Going into more detail, let’s try to identify which are the individual dApps with the most followings and which are daily queried by the DeFi industry community.

To do this, we refer objectively to the metrics of “unique active wallets” (UAW) on a monthly basis, i.e., the number of users who have performed at least one transaction on that protocol in a month, and the TVL.

The latter tells us how much money is locked inside the smart contracts of the platform in question and is an indication of its importance in the market.

Currently the decentralized protocol with the most UAW is Stargate Finance, an omnichain asset transfer protocol that uses Layer Zero technology.

This platform in the last month had about 2 million interactions from users’ wallets. 

The large volume of transactions is probably due to the airdrop narrative of LayerZero and Starknet in which trading on Stargate is one of the main eligibility criteria.

Following the applications with the most UAW in the past 30 days are Uniswap v3, Pancakeswap V3, and Iskra.

However, looking at the ranking of dApps with the most TVL we find the names of Lido, a liquid staking platform, with a value locked of $13.18 billion, MakerDAO, CDP with $6.88 billion, and Aave, a credit/debit platform with $5.45 billion.

It is worth noting that the top 5 protocols for TVL are projects developed mainly on the Ethereum blockchain, which remains the preferred network for users to develop smart contracts and in general to develop solutions from the DeFi world.

The dApps that generate the most revenue from platform fees

Turning now instead to an analysis of the most profitable dApps, we can distinguish 3 platforms that have generated far more fees than their competitors in the last 30 days.

In first position we find Uniswap, a leader DEX for decentralized trading, which generated $67 million in fees in the last month.

Right behind appears Lido, which in addition to being the dApp with the highest TVL also enjoys high profitability with fees generated equal to $55 million.

In third position is Pancakeswap, a decentralized marketplace of reference for the BSC ecosystem, which has generated fees of $37 million in the past 30 days.

Following this are many other projects that have a very interesting business and generate profits, but are far behind the 3 we just mentioned.

However, among them it is worth mentioning GMX, Convex Finance, Aave, Level Finance, TraderJoe, Blur, Sushi, Curve, and MakerDao.

When analyzing dApps in the DeFi world in terms of profitability, attention should also be paid not to confuse platform fees with the actual “profit” produced.

In fact, many dApps have high maintenance costs of their services, while others manage to survive with little cost to bear.

On-chain analysis tools provide discordant data between them. 

However, this graph proposed by The Block is quite explanatory of the representation of the dApps with more revenue and therefore more profitable.

It is very interesting to point out that all decentralized applications made much more money from fees during the year 2021 than in 2022 and 2023. 

In that year, both TVL and fees by Web3 dApps recorded values that were on average 3 times higher than today.

Stargate Finance: a gateway to the world of Web3

Stargate Finance undoubtedly represents the most interesting dApp of the moment as well as a platform with the most following at the transaction level from the community.

As mentioned earlier, the reason for this success may be related to LayerZero and Starknet, which will most likely release an airdrop to their early adopters.

Stargate being one of the central dApps of these projects, everyone thinks that the use of the omnichain communication platform can be taken as an example to determine eligibility for these airdrops.

As a result, the activity and number of transactions executed on this protocol, which is primarily used to transfer assets from one blockchain to another, is exploding.

In detail, the chains supported by Stargate are Ethereum, Optimism, Arbitrum, Avalanche Fantom, BNB Chain, Polygon, and Metis, while the tokens with which interoperability transactions can be performed vary from network to network. 

Fees are in line with other competitors offering similar services such as Multichain, Celer Bridge, Synapse, and Hop protocol.

In the last month, Stargate produced a transaction volume of $2.3 billion, lower only than the “Polygon PoS Bridge” with $4.1 billion, which only allows the transfer of assets from Polygon to Ethereum and vice versa.

Considering bridges that support more than two networks, Stargate represents the top-of-the-line solution in the market as well as the best access gateway for the Web3 world.

The protocol also features a native token, namely STG, used primarily as a governance token in community decisions.

It is possible to monitor Stargate’s DAO activity and new proposals on platform developments on the official Snapshot page.

STG has a current price of $0.69, a capitalization of $136 million, and a circulating supply of about 20% of the fixed maximum.

Although the tokenomics of the token are not the best, we could expect STG’s price to increase in the long run should the Stargate platform be used consistently in the coming months/years as well.

https://en.cryptonomist.ch/2023/06/01/elizabeth-warren-links-crypto-fentanyl/

Yesterday, during a US Senate hearing, Senator Elizabeth Warren called for permanently eliminating the international fentanyl trade by blocking crypto payments at the source.

Warren’s theory refers to the fact that Chinese manufacturers find the inherent features of cryptocurrencies attractive, citing a study by Elliptic.

Let’s look at all the details of the news together.

Elizabeth Warren attacks crypto again by mentioning link to illicit fentanyl trade

US Senator Elizabeth Warren, known for her anti-crypto crusades, has made explicit the link between digital cryptocurrencies and international fentanyl dealing, calling for the issue to be treated with an iron fist.

The senior US official cited a study by Elliptic, a blockchain analytics company, to highlight how more than 90 Chinese companies smuggle fentanyl precursor substances by accepting payments in cryptocurrencies, especially in Tether (USDT) or Bitcoin (BTC).

The substances shipped from China would generate a huge opioid market that would flow right into the United States, where about 69,000 people die each year from this type of drug.

Also appearing in support of Warren’s theory of crypto’s culpability in this matter was US Treasury Department Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenbergh stating: 

“The reason they would find it tempting is the same reason other financial criminals would find it tempting, which is that there is an element of pseudonymity that they seek.”

According to the two officials, there is an urgent need to dismantle the fentanyl trade within the country, starting at the source and imposing tough regulations on cryptocurrency payments.

In particular, Warren suggested that her “Digital Asset-Anti-Money Laundering Act” could help eliminate the problem of fentanyl circulation in the US, which according to the DEA is a drug 100 times more potent than morphine.

The senator’s bill will be introduced in this congress and could create problems for the crypto industry in America. 

Meanwhile, the presidential candidacy of lawyer Robert F. Kennedy Jr, grandson of former President John Fitzgerald Kennedy, could put a spoke in the wheels of Elizabeth Warren’s authoritarian ideas.

In fact, Kennedy has publicly come out in favor of Bitcoin and would like to accelerate the adoption of cryptocurrencies in the country.

The dystopian philosophy of the US senator

By now, it is well known that US Senator Elizabeth Warren has an aggressive attitude toward the cryptocurrency industry, having called it out several times by highlighting only the negative aspects and never praising the positive aspects of the underlying technology.

It is strange how Warren considers crypto assets to be responsible for fentanyl trafficking in the United States, without thinking about the role that Chinese companies play in this context.

Although cryptocurrencies have been banned many times in China, there are still those who manage to make illicit deals by accepting them as payments.

To solve the problem, all that would be required would be to attack the gateways and fiat onramp platforms that allow those companies to convert their crypto revenues, the proceeds of the illegal trade, into the local currency.

Moreover, it remains dystopian that Senator Warren never mentioned the role that the US dollar plays in America’s drug game.

While it remains true that it is not the medium that decrees the success or failure of the action itself, it remains interesting to note this aspect.

According to reports from Data Bridge Market Research (DBMR), the psychedelic drug market alone in the country, on which there has never been a connection to the crypto world, is worth $2.8 billion, with high growth prospects for the coming years.

Hence, why not talk about one dealing in the order of magnitude of BILLIONS of dollars and loudly attack another, that of fentanyl, where crypto payments of “only” $37.8 MILLION have been reported? (Chainalysis data).

The impression is that the senior US official has political interests in pursuing her anti-crypto campaign without taking the slightest interest in what are the real problems in the States.

Rather, Warren believes that blocking the country’s technological progress by disincentivizing American companies from doing business with blockchain and cryptocurrencies is the right choice at a time of severe crisis when labor market data are not reassuring.

Chapeau Senator.

https://en.cryptonomist.ch/2023/05/31/deutsche-telekom-validator-network-polygon/

Deutsche Telekom, a leading telecommunications company on a global scale, announced today that it will become a validator on Polygon’s infrastructure.

The news is very positive for Ethereum’s Layer 2, which fortifies and decentralizes its Proof-of-Stake network even more.

Let’s take a look at all the details together.

Deutsche Telekom extends its nodes on Polygon

The multinational telecommunications company Deutsche Telekom will soon become an effective validator within the infrastructure of Polygon, Ethereum‘s main scaling network with a $1 billion TVL.

This does not represent the first instance of the German company joining the blockchain world, given its recent participations with Flow, Celo, Chainlink and Ethereum.

In this regard, with reference to Vitalik Buterin‘s network, which serves as a central hub in the development of smart contracts, Deutsche Telekom had entered as a node operator in October 2022, more specifically in the liquid staking market.

Today it is Polygon’s turn, which sees its inner circle of validators (about 100) expanding by further decentralizing how block validation is achieved while increasing network security in parallel.

About the news, the head of Deutsche Telekom’s Blockchain Solutions Center, Dirk Röder quoted the following:

“The Polygon ecosystem is very developer-friendly and resource-efficient. It is based on the highest security standards of the Ethereum ecosystem.”

On the other hand, the Chief Operating Officer of Polygon Labs, Michael Blank, praised the entry by the new partner with these words:

“This collaboration will pave the way for more businesses to embrace blockchain technology through Polygon and empower consumers by unlocking the ownership and autonomy that web3 technology offers.”

Therefore, Deutsche Telekom effectively becomes part of the network of nodes that produce and validate blocks, participating in the consensus mechanism inherent in the Polygon infrastructure and contributing to the security of the blockchain and the many Supernet apps.

Layer 2 represents one of the most developed solutions in terms of scalability and decentralization, allowing developers a wide range of implementations.

The partnership will positively contribute to expanding the development possibilities of users in the blockchain world who already enjoy simplified access to scaling solutions such as zero knowledge rollup, sidechain and blockchain-specific decentralized apps.

What is Deutsche Telekom

Deutsche Telekom represents one of the world’s leading telecommunications operators, established in 1966 from the former state monopoly Deutsche Bundespost.

To this day, it is a parastatal company with the German state still holding the majority of shares, but privately managed and organized.

Deutsche Telekom controls a number of companies (all beginning with T-) involved in fixed and mobile telephony, Internet services, and business utilities, such as T-Home, T-Mobile, T-Online, and T-Systems.

New infrastructure node operator Polygon also owns majority stakes in foreign telephone companies such as Slovak Telekom, Magyar Telekom and T-Hrvatski Telekom.

The company, which is headquartered in Bonn, generates annual sales (2019 figures) of 80.5 billion euros, of which 95.2% comes from telecommunications services, 4.4% from IT and communications systems development, and 0.4% from numerous other activities.

The geographical breakdown of revenues is the following: Germany (23.1%), Europe (13.7%), North America (62.8%) and other countries (0.4%).

According to 2019 data, Deutsche Telekom has 216,000 employees and a net profit of 3.9 billion euros.

The company is publicly traded and its stock capitalizes a total of about 104 billion euros, with a price per share of 20.94 euros.

Deutsche Telekom has a presence in more than 50 countries and provides its services to about 178 million mobile, 28 million fixed-line and 20 million broadband customers.

Despite the fact that the telecommunications business is in decline across Europe, the company has shown a proactive approach to new technologies, exploring development solutions for infrastructure built on blockchain.

We hope that in the future the multinational company will push more and more into the web3 world by generating part of its revenue through block rewards and user tx fees and abandoning the outdated telephony business.

The latest news regarding Polygon and crypto MATIC

In addition to the partnership affair with Deutsche Telekom, there is more news for Polygon and the native MATIC token.

The most interesting news certainly concerns the achievement of a major milestone for Polygon’s Zk EVM network, which provides zero-knowledge cryptographic computation data by reducing block weight and increasing user privacy.

The new scaling solution, although it still has a low TVL ($15 million) and a number of active wallets of about 4 thousand, reached an ATH in May in terms of volume generated in a single day with 25 thousand transactions

This is a small but important step forward in the development and adoption of this zk network.

If you are interested in bridging funds from Ethereum to Polygon Zk EVM, you can do so here.

The second major piece of news concerns the expansion of activities aimed at increasing the liquidity and stability of the assets in the ZK network itself.

Specifically Gamma, a protocol for market making strategies has increased the network’s liquidity through liquid staking.

In addition, Clober, a liquidity protocol for EVM-compatible blockchains, has officially deployed its on-chain order book.

Both parties are helping to increase network liquidity and improve the overall user experience.

The MATIC token, despite relentless project developments and the success it is experiencing in the Zk world, is failing to emerge in a speculative manner.

Most likely this is due to the macroeconomic conditions in the markets and the uncertainty emerging in the sentiment of crypto traders.

MATIC has a current price of $0.886 per token, a market capitalization of $8.24 billion, and a circulating supply of 92.79% of total supply.

Prices are crushed by the 10- and 60-period moving averages on daily time frames with overtly bearish directionality.

The RSI gives no comfort in this regard, and it will probably be necessary to wait for new lows, likely in the $0.75 area to possibly see a reaction from the bulls.

In the meantime, the Polygon Labs team seems to have no fear on the speculative front and continues to improve its products, as is appropriate in a bear market period.

https://en.cryptonomist.ch/2023/05/31/crypto-exchange-hacks/

Crypto exchanges have always been the main target of cyber criminals, who through hack attacks have managed to steal a total of $3.45 billion since 2012.

Institutional investors, given the frightening figure, are looking for intermediary solutions capable of safely guarding their assets while providing convenience in operations.

Let’s try to delve into this issue by reporting on analytical research published by Binance.

Crypto exchange hacks since 2012: research by Binance

Since 2012, crypto exchanges have fallen victim to numerous hacks and cyber attacks, which have stolen a substantial amount of assets through a variety of methods.

Exchanges remain a favorite target of hackers, who try hard to circumvent their security measures given the high amount of cryptocurrency circulating within them.

In total, the sum amounts to about $3.45 billion across 48 different exchanges, with the theft curve accelerating from 2020, most likely motivated by the reputation the crypto industry has earned in recent years.

Those who lose out, without a shadow of a doubt, are mainly the investors, who punctually see their capital disappear from one moment to the next and in most cases are never compensated.

Although exchanges are supposed to serve exclusively as fiat onramp and trading solutions, it is now well known that many users use them as custodial solutions, given the user-side simplicity offered and given the low commission costs compared to non-custodial providers.

In addition, software or hardware non-custodial wallets underlie the need for good knowledge of best practices in terms of private key management and the mechanisms inherent in blockchain on the part of their users, who are still part of a narrow niche.

The average retail user prefers to download the Binance app, make a transfer from their home banking, trade (or gamble) on centralized markets that are much more liquid than decentralized counterparties, and custody assets directly on the exchange.

The dual custodial/operational role of these infrastructures, in addition to attracting smaller investors, also attracts many hackers, who try hard to find out the private keys to exchange wallets, thereby hitting a jackpot.

Binance’s research showed that of the 3.45 billion stolen since 2012, 29.4% comes from capital leaks through the hot wallets of these platforms, representing the most common method used by cybercriminals.

Next we find numerous other techniques used by hackers such as compromise of security systems and exchange servers, insider participation, data leaks, unauthorized transactions, internal staff errors, vulnerabilities in protocols and bugs.

The risks of self-custody for institutional investors and the role of centralized custodians

While retail investors, as mentioned in the previous section, prefer the convenience of exchanges, institutional investors are looking for more flexible solutions that can compromise between the security trade-off and operational convenience.

This kind of investor, who manages assets on behalf of third parties, is increasingly interested in cryptocurrencies and the volatility present in these markets but necessarily requires professional services with high security standards and easy access to assets to conduct trading operations.

Binance has classified traders who custody assets on behalf of institutions into 3 categories: custodians, custody technology providers, and hybrid custodians.

Each of these has advantages and disadvantages regarding private key management of wallets, regulatory protections such as insurance and audits, and speed of access to assets.

There is still no single solution nowadays that can enable maximum security and at the same time offer all the conveniences and advantages related to the management of trading operations.

In this regard, experiments are underway that can find a meeting point between these two institutional needs.

In any case, according to the study conducted by Binance, The Off-Exchange Settlement (OES) represents one of the best examples regarding custody providers offering advanced trading services.

Specifically, OES allows institutions to access their assets in much the same way as on retail exchanges, but without the need to actually deposit capital on the platform.

The mechanism consists of 3 steps:

1. an institutional custodian holds the assets internally on behalf of a client;
2. the custodian locks the majority of the fund into a multi-signature / MPC wallet;
3. a crypto exchange provides the institutional client with a tradable credit on the platform that reflects the amount of assets managed by the custodian.

This provides the right trade-off between security, dictated by the presence of a multi-signature wallet and the guarantees offered by the custodian, and the trading-side convenience offered by the exchange.

To date there are few providers of OES solutions, among them we can mention Ceffu, a partner of Binance and Copper, which provides this service for transactions of smaller volume.

Mt.Gox: the largest hack in the history of crypto exchanges

The largest hack in the history of crypto exchanges concerns the attack that hit the MT.Gox exchange platform in 2014, which at that time held the record for volumes generated by traders in the industry.

MT. Gox was founded in 2007 by Jed McCaleb, a computer programmer who initially established the platform as an exchange venue for cards from the well-known game “Magic.”

In fact, the initial name of the exchange was “The Gathering Online Exchange,” but it was renamed MT.Gox the moment there was a shift into the cryptocurrency world.

In 2014, the platform handled about 70% of all Bitcoin trading activity, both because of its centrality and the fame it had gained, and because there was not as much competition in those years as there is today.

In February of that year, the largest hack in the history of cryptocurrency theft occurred, taking 850,000 BTC from the exchange.

The platform quickly declared bankruptcy and investors were left holding the bag for many years until a settlement was reached between creditors and bankruptcy attorneys.

Specifically, given the recovery of 200,000 BTC and the disproportionate rise in the price of the asset in the years that followed, the MT.Gox trustee found himself holding a dollar countervalue capable of repaying all creditors based on the balance in FIAT (not BTC) held in early 2014 on the exchange.

In practice, creditors recovered everything they had lost in dollars, but they lost the opportunity of a lifetime in holding the best-performing asset of the entire decade.

Liquidations are still ongoing and currently the MT Gox trustee still holds 137,890.98 BTC while the remaining 64,214.99 were sold to the market between December 2017 and May 2018

From that event onward began the first narratives of Bitcoin maximalists about the importance of holding one’s private keys personally and the dangers of exchanges as cryptocurrency custody platforms.

https://en.cryptonomist.ch/2023/05/30/ethereum-news-new-erc-6551-standard/

The latest news for the Ethereum blockchain concerns the introduction of a new protocol standard for token issuance: the ERC-6551.

This new standard allows developers to improve the design of Non-Fungible Tokens and users to take advantage of hitherto unseen possibilities.

See all the details below.

Latest news for the Ethereum blockchain

The most relevant news regarding developments in the Ethereum network relates to the introduction of a new standard for the issuance of tokens, particularly non-fungible tokens (NFTs).

The Ethereum infrastructure, as is now known to the public, allows developers to create different types of cryptographic digital tokens, known as “tokens,” by relying on the distributed digital ledger that enjoys high security and an easy-to-use framework.

These tokens fall within certain standards, i.e., “rules” and characteristics that they must cover in order to transit efficiently within the network.

Existing standards include ERC-20, ERC-721, ERC-777, ERC-1155 and ERC-4626, of which the first two represent the most widely used cases and the ones we will take as examples here to introduce the newest standard namely ERC-6551.

ERC-20 trivially allows for the creation of fungible (interchangeable with each other) assets such as governance tokens and utility tokens, while ERC-721 is mainly used for the creation of NFTs, i.e., one-of-a-kind tokens with unique characteristics.

The problem with these two categories is that they are limiting and do not allow the performance of a number of actions, which are, on the other hand, possible and replicable on a large scale with the newly developed ERC-6551 standard.

The latter, generally speaking, improves the user experience by making it more dynamic and interactive and by adding more layers of ownership over all existing NFTs.

Then again, it was clear for months that the world of non-fungible tokens would evolve and experiment with new standards in the wake of their success in 2021, even though these are simply JPGs (or other formats) linked to the blockchain.

In the next section we explore the characteristics of ERC-6551 tokens in more detail.

Ethereum news: ERC-6551 standard will make the world of NFTs more dynamic

Following the latest news regarding the introduction of the ERC-6551 standard dedicated to non-functional tokens, Ethereum becomes even more fascinating and able to handle a large amount of requests from communities regarding more or less complex needs.

In this case, the main requirement was to make the NFT sector more dynamic by adding very interesting features.

First, ERC-6551 tokens function as real cryptocurrency wallets capable of holding assets, hence introducing for the first time in blockchain history the assumption that one asset can hold another asset within it.

Benny Giang, co-author of the governance proposal by which this standard was introduced, described this feature, known as the “token bound account” (TBA), quoting it this way in an interview:

“It could hold onto ETH, it could hold USDC, it could hold pepe coins, it could hold other NFTs.”

On a more technical front, ERC-6551s use an ERC-721 NFT-compatible permissionless registry, which serves as a directory for TBAs. The registry distributes a proxy contract for TBAs by inheriting the metadata of the original ERC-721 token.

The assets contained within them can be transferred to other TBAs through a function on the proxy contract.

In addition, this new standard makes it possible to sign messages and verify signatures on behalf of the token by interacting directly with other smart contracts on Ethereum’s various dApps.

This is a very important step for the Ethereum ecosystem, which from now on will be able to experiment with new ways to interact socially on the Web3.

In fact, another important “milestone” is introduced regarding the social governance property of NFTs, even giving the possibility to implement personalities and dynamic characteristics to these non-fungible tokens through the use of AI.

Again Giang’s words about this feature:

“So now that an NFT has its own account address, it could be a signer on a multisig, it could have its own ENS sub-domain. It could participate in voting on proposals.”

The NFT market on Ethereum

With the latest news regarding the introduction of the ERC-6551 standard, the NFT market on Ethereum could return to the hype levels seen during 2021 and 2022.

Over the past 30 days, Ethereum’s network has been the underlying infrastructure enabling NFT sales of $389 million, down 23% from the previous month.

In total, the blockchain generated $43.4 billion in sales, an incredible figure when compared to other competing networks such as Solana, Ronin, and Flow, which do not even come close to Ethereum’s volumes.

Nonetheless, since mid-2022 we have seen a significant downsizing of activities regarding the NFT sector on Ethereum.

This can be observed by looking at the trend graph of the number of NFT mints made on this network, which fell to multi-year lows in early 2023.

Notably, the average volume generated has also dropped dramatically from the golden periods we witnessed in 2021 and 2022.

This is probably due to the fact that at a time of market uncertainty, investors prefer to stay away from the more speculative markets such as NFTs and focus on sectors that are less profitable but have less inherent volatility.

We hope that with the advent of ERC-6551, the market for non-functional tokens on Ethereum can shine again, reaching, with or without wash-trading-generated volumes, at least the $1 billion mark in sales in a month.

If this does not happen, it would still not be a problem for Ethereum, which will continue undaunted to develop more fun and useful experiential solutions for its stakeholders. 

In fact, with or without volumes, technological progress cannot be stopped.

https://en.cryptonomist.ch/2023/05/30/chainalysis-link-between-crypto-opioids/

Crypto assets unfortunately are still being used as a currency on darknet markets, aiding the illicit trafficking of Fentanyl within the US, however research by Chainalysis US has shown that through on-chain monitoring this social scourge could be ended.

Cryptocurrencies are actually not all that anonymous and, unlike how they are portrayed by mainstream narratives, are highly traceable.

Let’s try to explore this in more detail in this article.

Illegal sale of fentanyl and crypto: Chainalysis US research

A few days ago, blockchain analytics firm Chainalysis US published interesting research on the role cryptocurrencies play within darknet marketplaces, particularly in what concerns the illicit trade in fentanyl, a synthetic opioid with effects 80 times greater than morphine.

In 2020, about 69,000 people died in the US from opioid exposure, 82% of them from fentanyl.

Unfortunately, it is well known, especially after recent law enforcement sanctions, that some drug-related trafficking is being financed through cryptocurrencies because of the ease with which money can be exchanged remotely and the speed at which transactions can be executed.

Another on-chain analytics company, namely Elliptic, also conducted a study on the phenomenon of worldwide distribution of fentanyl, providing us with this graph illustrating the number of related payments in cryptocurrencies.

However, cryptocurrencies are actually not very effective in evading the identity of traffickers, the blockchain being public and controllable by anyone. 

In this regard, Chainalysis has identified crypto addresses associated with alleged sellers of the fentanyl precursor substance based in China, the main production hub from which distribution to other countries belonging to Latin America starts, where it is in turn processed and shipped as a finished product to the US.

As of 2018, Chinese supplier addresses have received crypto payments of more than $37.8 million: by studying these movements, the work of on-chain analysts mixed with law enforcement could play a crucial role in identifying the supply chain.

In fact, thanks to the study of on-chain flows, it has been discovered that many maxi seizures of fentanyl that have occurred at the US-Mexico border are related to the regional distribution patterns identified by the DEA, or “Drug Enforcement Administration.”

In this sense, although cryptocurrencies are still being used, albeit minimally, to finance these trafficking, they may prove to be a double-edged sword for the producers themselves.

Cryptocurrencies are not anonymous and do not facilitate illicit trafficking

The Chainalysis US study gives us an even better understanding of how cryptocurrencies can be a very important control tool for authorities to counter trafficking in fentanyl or narcotics in general.

The common narrative describes cryptocurrencies, particularly Bitcoin, as the preferred trading currencies of drug traffickers because of their supposed “anonymity.”

The assumption is FALSE: First, most illicit exchanges still take place through classic cash, which, in contrast to Bitcoin, is never accused of facilitating these activities.

Second, many participants in illegal activities adopt cryptocurrencies for the simple reason that they allow value to be exchanged across the board in an instantaneous and “PSEUDO-ANONYMOUS” manner.

The anonymity of cryptocurrencies, is guaranteed as long as the addresses involved in the transactions are not discovered and made public.

In fact, should law enforcement succeed in its intent to identify one or more of the poles of these criminal movements associated with exchanges of monetary value in cryptocurrencies, things could put the entire traffic.

Through the in-depth study of the transactions being made in the network, with the help of industry experts such as Chainalysis, it is possible to go backwards and unearth all the addresses with which the gangsters did business by identifying suppliers, distributors and retailers.

If only institutions would implement proper monitoring systems and control mechanisms for crypto transactions, illicit trafficking would most likely be greatly curtailed.

The US government may be more aware of the activity of Chinese suppliers of fentanyl in China, but so far it has preferred to act on a small scale, highlighting less data than the Chainlaysis and Elliptic research mentioned.

Last month, the US Treasury Department imposed sanctions against two Chinese chemical laboratories, namely WuhanShuokang Biological Technology and Suzhou Xiaoli Pharmatech,on charges of selling fentanyl precursor substances to Mexicans. 

In addition, a man has been indicted who is alleged to have accepted crypto payments from one of the two companies mentioned.

The preconditions for limiting or even eliminating these trades are there, what is lacking is goodwill in introducing monitoring systems and cooperation between different governments.

The crypto analysis company Chainalysis US

Chainalys US is a blockchain analytics company that provides software, data and services related to on-chain transactions to government agencies, exchanges, financial institutions and cybersecurity companies in more than 70 countries.

The company’s goal is to create a more transparent and crime-free Web3 digital environment by increasing access to cryptocurrencies by institutions and retailers.

Chainalysis uses investigation, compliance and market intelligence software to solve cases of fraud, cyber theft or exploits within the blockchain world.

Typically when cases of attacks occur against decentralized protocols, exchanges or autonomous organizations that base their activities through crypto exchanges, Chainalysis is often called upon, precisely because of its ability to read digital transaction logs and identify the culprits.

The company has received numerous awards and kudos from entities such as Forbes, Fast Company, Deloitte, W3B and CB Insight. In particular, it was cited by Forbes as one of the top 50 fintech companies in the world.

New technologies underlie immense development potential for society, however, it is also necessary to monitor fraudulent activities and limit the spread of cryptocurrencies in that direction as much as possible.

As reiterated in the previous paragraph, the introduction of clearer regulations and the implementation of monitoring systems by government agencies, could make the difference in stopping illicit trafficking and activities, through the help of Chainalysis as well.

The trust factor plays a key role in the expansion of this world, about which there is still mistrust: the work of Chainalysis in this regard could be crucial in giving banks, companies, stock exchanges, and governments the trust they need to explore the true potential of the Web3.

https://en.cryptonomist.ch/2023/05/29/crypto-news-ecoterra-luna-monkeys/

In this article we look at all the most relevant news for the crypto assets Ecoterra (ECOTERRA), Monkeys (MONKEYS TOKEN) and Terra (LUNA), along with a price analysis.

Are there opportunities to exploit in these three projects or are there factors that suggest we should stay away from them?

Full details below

The latest crypto news for Ecoterra (ECOTERRA), Monkeys Token (MONKEYS) and Earth (LUNA)

We begin the roundup of market news by talking about the Ecoterra crypto platform.

The main news for the project that aims to create an environmentally friendly blockchain ecosystem concerns the achievement of another milestone in the presale of its token.

In fact, Ecoterra has been conducting an early sale of the ECOTERRA token directly on its website for weeks now, and just now reached the figure of $4.3 million raised.

We are currently in the seventh presale round in which the token can be purchased at a price of $0.0085.

There will be at most 2 more rounds until the $6.7 million goal is reached as initial funding for the project.

Instead, covering the subject of memecoins, a crypto project called Monkeys that alludes to a vague connection with multi-billionaire Elon Musk is attracting a lot of attention.

Like all meme-based crypto assets, the only activities involve promoting and marketing one’s brand on social media, as there is no underlying technology.

Prominent among Monkeys’ latest communications is this cute tweet celebrating the “MonekyBusinness memorial week community competition,” referring to a desire to push the community to have Elon Musk or Vitalik tweet the phrase “Monkeys to mars.”

Moving instead to decisively more serious projects, let’s see what is happening in the Terra ecosystem.

The non-custodial wallet Terra Station, native to the project, has made some changes regarding its interface by inserting the “moon” background.

The latter, inspired by the name of the LUNA token, embodies the potential of the project and the desire to return to its shine as before the May 2022 crash.

Although this is not part of the technical development of the infrastructure, it still serves to guide and motivate the community toward a new era.

Price analysis of the crypto assets ECOTERRA, MONKEYS, and LUNA

Let’s now turn instead to the technical analysis of ECOTERRA, MONKEYS TOKEN, and LUNA.

Starting with ECOTERRA, with which there is actually not much to say since the token is still in presale, all we will do is mention the current price, which is $0.0085 per token and the price of $0.01 expected for the listing, which will presumably take place within 2-3 weeks.

Pay close attention to this coin, because there will most likely be a dump on the day it is listed on the markets, as many users have had the opportunity to buy it at very low prices and will be enticed to sell it immediately on the market.

Usually presales, unless there is a product with a very large demand behind it, open the dances with red candles during the first hours of trading.

This is the tokenomics of the ECOTERRA presale.

As for MONKEYS, we can observe in the chart a price of $0.0000000187 for the memecoin, which is currently in the price action indecision zone, wedged between the 10-period and 60-period moving averages.

After having had a crazy 3800% increase in its value from 4 to 16 May, it corrected 70% over the next 10 days, and then recorded a bounce that brought it to its current prices.

The situation now is complex for MONKEYS TOKEN: the odds play in favor of a bearish continuation of the chart, however since this is a token tied very much to community trading activity, there could be surprises.

In principle, the bearish scenario should be more concrete should there be a break of the low at $0.00000001262 while the bullish scenario could attract more willingness to open a long at the break of the $0.00000002285 level.

The cryptocurrency has a capitalization of $18 million, a volume in the last 24 hours of $320,000 and a max supply that coincides with the circulating supply.

On the LUNA front, traders’ expectations are blatantly bearish, with the trend continuing in search of new lows for several weeks now.

Certainly this is not the most appropriate time to go looking for the speculative long on the altcoin market, both because of the difficulties on the macroeconomic front with the US crisis and the outlook for the crypto sector and Bitcoin‘s price action.

Nevertheless, on LUNA we can expect a gain-worthy bounce, in view of the RSI unload, with adequate confirmations to support it.

In December when LUNA touched the 27 level on the RSI, a 100% pump on the cryptocurrency‘s price followed, but with the same conditions in March and early May there was no revelatory price rise.

Therefore, going long blindly whenever the RSI of an asset reaches an oversold value is not the right choice and it is necessary to wait for confirmation.

In the case of LUNA, the upward break of the psychological resistance of $1 could trigger a price rally, with the understanding that the odds are in favor of shorts.

The crypto has a capitalization of $241 million, volume in the last 24 hours of $22.7 million, and a circulating supply of 277 million coins compared to the total set at $1 billion.

The former CEO of Terra (LUNA), Do Kwon, returns to jail after bail was revoked.

Although it now has nothing to do with the Terra (LUNA) project, it is still interesting to deal with the vicissitudes of its former CEO and cybercriminal, Do Kwon.

The individual had been arrested in Montenegro along with his trusted colleague Han Chong-Joon for possession of false documents after attempting to board a flight to Podgorica in March 2023. 

Later, the two had been released on bail of $436,000 (each) and supervised through home detention.

A few days ago, however, came bad news for the founder of the now-bankrupt company Terraform Labs, who saw the cancellation of the courts’ decision to accept release on bail.

Specifically, Montenegrin prosecutors appealed the previous approval of the house custody measure considering the seriousness of the events that occurred and the publication of an Interpol red notice against him.

There is even an extradition request for Do Kwon from South Korea for computer fraud and swindling.

The ball is now in the Basic Court, which can reconsider Kwon and Chong-joon’s bail in a technically infinite number of trials, as there is no limit to the number of decisions this court can take.

According to some rumors, Do Kwon faces 40 years in prison in Singapore and an additional five years in Podgorica, where a trial against him is expected on 16 June.

Throughout all this, the United States is also remotely monitoring the former Terraform Labs billionaire, having cited him on 8 counts.

The situation does not look good for poor Kwon, who risks being behind bars until old age.

R.I.P

https://en.cryptonomist.ch/2023/05/29/7-7-million-crypto-hack-arbitrum/

Yesterday, a protocol on the Arbitrum blockchain fell victim to a hack that resulted in the loss of $7.7 million in crypto.

The attacker was able to exploit a problem involving the protocol’s internal slippage management, making a fortune in a matter of minutes.

Let’s try to delve deeper into the matter.

Jimbos, Arbitrum’s crypto protocol, hacked for 7.7 million

On Sunday, 28 May at 2:30 AM, Jimbos, a decentralized crypto protocol based on Arbitrum, was hacked for 4,090 Ether, corresponding to over $7.7 million.

The hacker was able to exploit a slippage problem in the platform to carry out a series of transactions by taking home the loot and emptying the protocol’s pools.

Slippage, for those who do not know, refers to the difference between the expected price of a transaction and the price at which it is actually executed.

This spread usually occurs when large orders are placed by whales that unbalance the relationship between two tokens in a pool, or when there is little liquidity within a decentralized market.

In this case, however, the problem with the Jimbos protocol is not about slippage per se, but rather the absence of a control measure that can limit undesirable effects.

This address, due to the flaw manifested by the system, was able to manipulate the liquidity of the protocol at a skewed price, removing 4090 Ether from the pools through a reverse swap operation.

The news was immediately noticed and reported on Twitter by Peckshield, a cybersecurity company in the web3 world, and later also announced by the official Jimbos project team

The Jimbos protocol, created not even a month ago, was intended to address the volatility of its native JIMBO token through a testing approach.

Unfortunately, the slippage vulnerability was fatal and allowed the malicious party to exploit it in its favor by altering the price of the token, which lost about 40% of its value last night.

In the following chart (TraderJoe V2 market pair JIMBO-WETH) it is possible to see a large red candle, illustrative of what happened. 

At 2 AM on 28 May, the candle opened with a price of $0.24, touched a high via a spike of $1808, and closed at $0.19 per token.

It is evident how the monstrous manipulation of JIMBO’s price allowed the attacker to profit.

The flow of stolen funds on Jimbo and the hacker’s escape

After tampering with the price stability of the crypto protocol based on Arbitrum, the criminal used the Bridge Stargate to move the stolen 4090 ETH onto the Celer network.

Previously, the same individual had used the Tornado Cash mixer to extract the 1.6 ETH as seed cash with which to pay fees for his operations.

Tornado Cash is a privacy-focused protocol that allows its users to make their transactions untraceable by mixing their funds with those of other users on the platform.

After several transactions, the funds arrived at this address, where they are currently stored.

The following image provided by Peckshield shows us how the flow of crypto stolen by the attacker unfolded, who by the end pocketed 4048.3 ETH.

The Jimbos team, after realizing the capital leak, said on social media that it had contacted law enforcement and several teams of cybersecurity experts who have worked in past exploits at Euler Finance and Santiment.

It is worth recalling that all transactions occurring in crypto are publicly visible on the blockchain, despite common narratives from industry detractors describing them as impossible to trace.

Should the attacker stumble, for example, trying to sell stolen ETH for FIAT, he would be discovered by analysts breathing down his neck, and through the cooperation of the exchange in question he could be quickly identified.

A Web3 security expert user involved in the Jimbos support team on the news hinted that things could get ugly for the thief if he does not immediately return the funds

Crypto and cybersecurity: hacks don’t concern only Arbitrum

Unfortunately, hacks and exploits in the crypto world are commonplace and do not affect only the Arbitrum network, but the entire DeFi industry.

Despite the fact that several billion dollars are invested within a multitude of decentralized protocols, this type of finance, untethered from trusted intermediaries, is still an experiment in need of improvement.

In particular, the complexity of the smart contracts on which these marketplaces are based means that a single error in the code or bug can prove fatal and compromising to the entire project.

In May alone, counting the latest Jimbos hack, nearly $17 million was stolen, which at the end of the day constitutes a paltry sum compared to what was taken away by hackers and cyber thieves.

In fact, DefiLama‘s data show the total hacked since 2016 amounts to about $6.5 billion, with a record high of $782 million in October 2022.

The most affected niche in this context is bridges, which are highly vulnerable and full of flaws that have been punctually exploited by some malicious user.

About $2.5 billion have been taken away from bridges alone.

The hope for the years to come is that we can develop some sort of protection against cyber attacks, through spreading awareness about these issues and through stricter regulation of the DeFi world for crypto criminals.

Unfortunately, the evolution of technology and the creation of innovative applications includes these mishaps, which must be taken as lessons for the community to develop suitable security measures for the future.

https://en.cryptonomist.ch/2023/05/28/what-ethereum-mev-bots/

This article will discuss the topic of MEV bots, which are a series of individuals who exploit powerful hardware and specially designed techniques to make a profit in the business of producing blocks in the Ethereum blockchain.

This is a very complex topic, and an initial introduction to the topic of block validation in Ethereum is necessary again to be able to understand what MEV bots are and why it is interesting to talk about them.

All the details below.

An initial premise: the role of the validator and searchers

As anticipated, before talking about MEV bots on Ethereum it is essential to have a 360-degree view of how block validation and publishing works on the blockchain devised by Vitalik Buterin.

While it is understood that MEV techniques can also be used on other networks, in this article we will focus exclusively on the Ethereum chain so as not to create confusion.

On it, all transactions are initially grouped in the mempool, waiting to be grouped and added to a block, before actually being published.

Up to that point, the transactions remain pending and the crypto assets are not made available to the user who is to receive them.

The task of producing the final block is up to the validator (with proof-of-work it was the miner) who can independently choose which transactions to include first.

At this point it is IMPORTANT to understand that the figure of the validator gains from this activity in two ways: from the block reward (in the case of Ethereum, 2 ETH per block) and from the TX fees of users who want to have priority of execution.

Hence, it is in the validator’s interest to choose the transactions that “pay the most” and create a block that rewards it the most in terms of tx fees. 

Consider that sometimes these exceed the amount of the block reward. 

The essence of the EVM, which we will discuss in more detail in the next section, is based on this very concept, namely, the fact that the block producer can sort the transactions in a block at will, making them execute according to a certain chronology that will then have certain effects on the market.

Another very important figure in this process is that of searchers, i.e., individuals who provide a “package” to the validator with a possible ordering of transactions, so as to simplify the work for it. 

This is an already preset transaction combination that validators can exploit to earn as much from TX fees as possible, while rewarding the searchers with a commission for their work.

However, the gain for searchers lies not so much in the commission they are entitled to, but in the effects that are caused when a validator chooses to publish their proposed block version.

In fact, by doing so, the searcher can take advantage of arbitrage opportunities on the DEX by choosing to order transactions in such a way as to create slippage on the price of an asset and take advantage of this price difference.

Then there are other techniques that searchers and validators can exploit, sometimes trying to rip each other off by following the profit motive exclusively

The operation of Ethereum MEV bots in detail and the value creation process

After the initial preamble, we can finally talk about MEV bots on Ethereum.

The term “MEV” refers to “Maximum Extractable Value,” which is that set of techniques that seek to maximize the profit of an individual (whether a validator, searcher, or relayer) by choosing to include, omit, or reorder certain transactions in a blockchain.

Since the Ethereum blockchain is subject to the use of smart contracts and is full of decentralized marketplaces ranging from simple DEX to lending platforms, we understand well that choosing the ordering with which multiple transactions can be executed totally changes the end result, especially when large amounts of cryptocurrency are involved.

It is not always the validator who gains based on the sorting of tx in a block: although this party earns the block reward and user tx fees, sometimes other players benefit leading to multimillion-dollar profits even at the expense of the validators themselves.

It is good to understand that the person who exploits these EVM techniques is not just any user, but an expert who uses very complex hardware and specialized software in identifying the best strategy and carrying this out in an automated way.

We can summarize all EVM techniques in the following cases:

• asset price arbitrage on different decentralized markets;
• frontrunning or sandwich attacks;
• loan liquidations in DeFi.

Let’s try to delve into the second case, that is, frontrunning attacks: by exploiting the capabilities of the individuals involved in block publishing, it is possible to anticipate a significant purchase order (previously left pending in the mempool) to create an increase in the price of an asset, and always exploit the logic of transaction ordering to place a sell order in the next instant and sell the same asset at a higher price than the initial one.

This is more specifically referred to as a sandwich attack when a buy tx is placed before a major order (e.g., a purchase of 1000 ETH) and a sell tx is placed immediately after.

The slippage caused by the whale order represents the profit of the MEV strategy.

The world of EVMs is extremely complex, and these examples we have provided represent only the tip of the iceberg of a much more complicated set of strategies and techniques that have been carefully crafted to try to make a profit.

In any case, it is important to remember that when a validator or searcher profits from such a trade, for example by “artificially” creating a price slippage on a DEX, there is always a counterparty that loses the same dollar value.

Here too, as is the case in trading, the game is zero-sum: when it comes to money, there is no ethics.

The pros and cons of the MEV techniques used by bots on Ethereum

You are probably wondering what the advantage is of having a structure of bots on Ethereum that exploit MEV strategies, sometimes playing dirty, to get rich behind someone else’s back simply by managing the sorting of tx in a blockchain.

There are different currents of thought that praise or criticize the essence of MEVs and these strategies.

Those in favor of MEV bots mainly believe that this kind of on-chain activity and competition promotes stable asset prices in DeFi protocols and makes lending platforms less dangerous.

It is precisely because of the MEV bots that on Sushiswap and Uniswap, for example, the price of ETH is more or less always the same and no major variations occur that would harm trading on these protocols.

In fact, arbitrage opportunities are also and mainly generated by MEV strategies, but they are in fact exploited and concluded within the same block i.e. a few thousandths of a second later.

On the other hand, those who are against these maximum value extraction techniques argue that the user experience is definitely more unpleasant given the gas price increase caused by MEVs on Ethereum.

In the struggle to get the tx sorting preferred, individuals involved in this process increase tx fees to the point of forcing even simple users who want to make a simple cryptocurrency transfer to pay disproportionate fees.

In addition, some whale in carrying out on-chain crypto buying or selling transactions might suffer greater than normal slippage if he or she were targeted by a MEV, who for his or her part would earn the price difference caused.

In conclusion, MEV strategies represent an interesting insight into Ethereum’s blockchain architecture and the roles inherent in blockchain organization.

To date, this set of techniques is looked upon favorably by the Ethereum community, but as the ecosystem is constantly evolving, insiders are constantly monitoring the situation to prevent MEVs from threatening the consensus and integrity of the network, which has always been preserved so far.

We will see what the future of these bots on Ethereum will be and whether Vitalik and his own foundation will allow them to evolve or create solutions to destroy them.

https://en.cryptonomist.ch/2023/05/27/mantles-airdrop-those-who-use-testnet/

BitDao, the world’s largest decentralized autonomous organization, has launched its Layer 2 Mantle in testnet version and may release an airdrop to early users when the infrastructure goes live in mainnet.

Let’s see together how to try the network in testnet and what protocols to use to have a chance of earning MNT token airdrop.

What is Mantle’s layer 2 solution and how does it work?

Mantle is an Ethereum layer 2 blockchain that aims for super-scalability using a modular approach that can offer low fee costs and high security.

This type of infrastructure separates consensus, data and execution activities from the basic network layer to have different areas of specialization based on the activity in question.

Mantle manages this modular process by combining ethereum roll-ups with the decentralized data layer.

In particular, roll-ups enable high throughput within the ecosystem of compatible EVM applications

Compared with other blockchains, this type of layer 2 has many advantages such as hyper-scalable performance, unprecedented security, low cost of operations, and decentralization of the network’s decision-making processes.

Mantle represents the first experiment of layer 2 blockchain initiated by a DAO, which is the autonomous organization of BitDao.

A few days ago, a proposal was approved within the community entitled “Optimization of Brand, Token and Tokenomics” whereby it officially sanctioned the merger of BitDao’s ecosystem, products, the BIT token and the governance under a single brand called precisely Mantle.

In this way, the whole universe revolving around BitDao will be represented by Mantle, which will not exclusively cover the role of the layer 2 solution, but will manage under its name all the activities managed by the organization until now.

A rebranding is also planned for the BIT token, which will be renamed to MNT in a process in which progressively the holders of the first token will be able to convert a single unit for 3.14 MNT.

The Mantle network is currently in testnet and there is a possibility of an airdrop to early users of the infrastructure given that BitDao’s willingness to incorporate functions similar to those of upgradability and minting of ARB and OP tokens was put in writing in the latest governance proposal.

Mantle and the release of an airdrop for testnet users

As anticipated, those who will use the Mantle network in the testnet phase may be rewarded with a future airdrop of the MNT token that echoes the features of the tokenomic of the BIT token.

If we look closely at the circulating and max supply data of BIT we can see that only a fraction of the tokens are in the market while the big chunk is still in the hands of BitDao.

The launch of Mantle could be a way to accelerate the release of tokens still in “vesting,” in view of the plan described by the decentralized organization, while at the same time managing to generate hype without devaluing the price of the cryptocurrency.

That said, it is now time to try Mantle’s testnet.

First it is necessary to be in possession of a decentralized wallet such as MetaMask. If you do not have it, you can download it here.

After that, you will need to get hold of some GETH (goerli ETH), which is a test token (worthless) that is usually used for the Goerli Ethereum network, a test network of the Ethereum ecosystem.

To obtain GETH you can refer to this document where there are several faucet links on which to request these testnet tokens.

You may need to test more than one considering the limited availability of GETH on the Goerli ETH network. 

Some faucet may ask you to post a tweet and copy and paste the URL of the address so that it identifies you as a human and not a bot.

At this point, you will have to go to this website, connect your Twitter account and mint at least 1000 BIT tokens. 

Of course, none of this comes at any real cost.

Finally, once you have obtained the BIT tokens on the testnet, you will need to go to the “bridge” section and perform a few small tasks.

In detail, it is necessary to deposit the GETH and BIT test tokens on the “deposit” item, approve and confirm the transactions. 

The same process can be carried out in reverse by withdrawing the tokens placed in the “fake staking.” The more steps performed, the higher the chances of being selected for an airdrop, though this time with the real-value MNT tokens.

All the protocols to interact with and actions to perform to earn Mantle’s airdrop

After the minting phase of the BIT test tokens and depositing them on Mantle’s testnet page, let’s now see what other actions to perform to earn the MNT token airdrop.

Indisputably, since Mantle is subordinated by the decentralized organization BitDao and the listing of the MNT token will be managed by it, we should participate in the governance proposals that are made by the community.

You can vote at any proposal on the snapshot page having procured in advance a small amount of BIT token (NOT ON THE TESTNET), which can be acquired on Bybit, Mexc, Bitmart, Gate.io or Uniswap v3.

Among other on-chain tasks to be performed, we can start testing protocols in the Mantle ecosystem: these include DeFi projects such as Pulsar Network and FusionX.

All there is to do is to perform a few token swaps and provide liquidity to the protocols: each action can be done totally randomly, since we are on the testnet and do not risk losing money. 

The important thing is to repeat the operations periodically to appear as active users in the community.

As long as the Mantle layer 2 is in the Test phase, there aren’t many other strategies we can employ for the purpose of getting airdrop.

When the network goes live on the mainnet (and if MNT has not yet been listed on the markets) then we may change tactics and start providing (real) liquidity to the protocols, buy NFTs, execute trades, etc.

For now it is enough to be active in governance, mine some BIT tokens for free on the testnet and try FusionX and Pulsar Network.

At most we can participate in the quests on Zealy to get “roles” on the Mantle discord channel, which might help us to increase the chances of getting an airdrop.

https://en.cryptonomist.ch/2023/05/26/elon-musk-neuralinks-turning-point/

Great news for multi-billionaire Elon Musk and his brain interface company Neuralink, which has obtained the approval of the Food and Drug Administration (FDA) to begin the first brain implant trials on humans.

This is a turning point for Neuralink, which will be able to more easily pursue its mission and unlock the potential of its technology.

Full details in the news below.

Elon Musk’s Neuralink company gets FDA approval

Neuralink, a company focused on creating implantable neural interfaces, and its founder Elon Musk have received approval from the Food and Drug Administration (FDA) to launch the first human clinical trial.

This is a very important step forward for the tech company, which will finally be able to conduct human trials.

The US federal government had previously investigated the Neuralink company to make sure there were no violations of the Animal Welfare Act, under a request from the US Department of Agriculture (USDA) Inspector General.

The allegation was that the tech company allegedly killed about 1,500 animals, including nearly 300 sheep, pigs and monkeys, since 2018 in an effort to achieve results quickly.

Also involved in the dispute were concerns about the safety of Neuralink’s implants, particularly about the lithium batteries and the company’s ability to remove the device from patients’ brains without causing neurocerebral damage.

After the news of FDA approval, all doubts about the legitimacy of the neurocerebral implant company disappeared. 

At the same time, excitement skyrocketed for those in the industry who can finally get serious and pursue the company’s mission of creating a generalized brain interface to grant autonomy to the neurologically unimpaired and unfulfilled, unlocking human potential.

Elon Musk immediately congratulated the team on their splendid achievement.

Neuralink and Elon Musk may as of now open the first neurocerebral clinical trial in humans

After approval from the US Food and Drug Administration, Neuralink and Elon Musk can begin testing brain chips implanted in the brains of human test subjects, leaving the animal world behind.

Notably, the owner of Tesla as well as CEO of Twitter and backer of the famous cryptocurrency Dogecoin had already stated in 2019 that Neuralink would be able to start human testing in a few years. 

These are his words after the FDA approval:

“This is the result of the incredible work of the Neuralink team in close collaboration with the FDA and represents an important first step that will one day enable our technology to help many people.”

Neuralink’s brain-computer interface represents an extraordinary technological invention designed to enable its user to control a computer or mobile device while eliminating brain difficulties for those with certain conditions

The implant built with very thin chips and wires are inserted into patients’ brains through the use of a “surgical robot” considering the impossibility of successful operation through human operation.

Undoubtedly, these chips have the potential to change people’s lives for the better even though over the years these products have created extensive debates about the undesirable effects they might cause and the environmental impact produced by lithium-ion batteries.

Recruitment for clinical trials has not yet begun but Elon Musk and Neuralink said they will announce more information soon.

Elon Musk pioneers technological innovation

The 51-year-old multi-billionaire Elon Musk has always been considered a pioneer in technological innovation, and the FDA’s approval for the advancement of Neuralink’s work represents yet another medal for his achievements.

The individual has founded and/or acquired several tech companies over the years, such as Tesla, Starlink, Neuralink, SpaceX, PayPal, Hyperloop, and The Boring Company, demonstrating his dedication to developing high-tech products and services.

In addition, Musk has publicly expressed his support for the world of Web3 and cryptocurrencies, making explicit his sympathy for the memecoin Dogecoin, to the point of inserting the meme’s logo in place of the Twitter bird and leaving it there undisturbed for a few days.

As for Bitcoin, on the other hand, there has been a love-hate relationship, especially during the bull market of 2021 in which Elon drove the crypto community crazy with his conflicting ideas and constant back-and-forths. 

In particular, the decision to allow his customers to purchase Tesla electric vehicles using Bitcoin and the subsequent denial due to the fact that the market’s first crypto “polluted” too much created quite a bit of disruption in the industry.

Nonetheless, Elon Musk’s actions have always been directed toward positive ends for society and the environment, especially with regard to the electric car market and the reduction of Co2 impact in the transportation sector.

A very questionable character, at first glance bipolar, with a somewhat bizarre personality, but certainly a pioneer in the development of new technologies, capable of revolutionizing the world in which the global population observes the horizon of future tech.

https://en.cryptonomist.ch/2023/05/26/vanecks-price-prediction-ethereum/

Global investment fund VanEck has made its price prediction for Ethereum in 2030, highlighting optimism for the second most capitalized cryptocurrency in the crypto market.

The analysis was carried out taking into account a number of objective and verifiable data which overall treat Ethereum as a business rather than a blockchain.

Let’s see together VanEck’s price estimates and what interesting details emerged from the study.

VanEck and its bullish price forecast for Ethereum

VanEck, the New York-based hedge fund, has given its opinion on the future price of Ethereum, with a forecast that sees the crypto going above $10,000 by 2030.

The methodology by which the valuations were made, takes into account well-established data such as projected cash flows of the Ethereum network, assessment of market capture, and revenue distribution.

Overall, Ethereum was analyzed as a business in its own right, given that, according to VanEck, it offers a service that is highly demanded by the market, namely providing its framework and security to all users who want to “trade” in the Web3 world.

Decentralized applications and smart contracts cannot function without a reliable transaction layer that can securely scale all requests that are proposed on-chain. 

In this context, the blockchain devised in 2014 by Vitalik Buterin represents the most robust solution with a degree of efficiency and decentralization inferior only to that of Bitcoin, which, however, cannot accommodate smart contracts in its ledger, limiting itself to mere P2P money transfer.

VanEck believes that Ethereum will capture value precisely from the concept of “Security as a Service,” which will be increasingly demanded by all the applications and infrastructures that will emerge between now and the next few years.

Going into detail now on the price analysis, we can see that the investment fund did not provide a single projection for Ether, but defined a price target for three future scenarios.

In the most bearish scenario, ETH will reach a price of $343 in 2030, in the neutral one it will touch a value of $11,849 while according to the most optimistic estimate it will reach as high as $51,006.

Ethereum price predictions: the Flashbots Layer 2 market

Very interesting details emerged in the study that led the investment fund to make such a bullish Ethereum price prediction, especially for the Layer2 and FlashBots MEV market.

In particular, VanEck believes that thousands more Layer2s, which are layer 2 infrastructures that rely on Ethereum to enjoy its framework and security, will emerge in the future, with a range of off-chain operations being performed.

Competition will lead to lower L2 margin rates from the current 15-40% to 10% in 2030 while assuming at the same time that 98% of all Ethereum transactions will originate from these very lower substrate blockchains.

At the same time, 50% of the total asset value will remain on the main blockchain, which will continue to earn from all transactions that are executed due to its predisposition as a “global computer for the world.”

The concept of “Security as a Service” is of fundamental importance to Ethereum’s business, which while securing all assets and smart contracts within its network, sells blockchain space to anyone who wants to participate in the business as validators, builders or relayers. 

All these actors collaborate and compete with each other at the same time to issue a block of transactions on Ethereum and to decide the order in which they will be executed. 

Indeed, the validation of blocks on this blockchain is not done randomly, but there are many individuals operating with sophisticated hardware, known as flashbots, who through MEV maximization strategies decide the order of users’ transactions.

By proposing their own version of blockchain, these bots take advantage of arbitrage opportunities, liquidations, and “frontrunning” large orders to make a lot of money.

In parallel, the Ethereum blockchain earns more fees from this activity because the sorting of tx in the block, costs flashbots a lot in gas fees.

VanEck thinks that MEV bots will help bring in $19.6 billion to the Ethereum network, while still seeing their TVL drop from 2% today to 0.10% in 2030.

To date, 1 in 4 blocks in the chain is offered through these MEV strategies.

Ethereum became deflationary after the London hard fork

Another very interesting insight in the Ethereum price prediction provided by VanEck concerns the “burn ratio” of ETH that will be reached in 2030.

After the London hard fork, specifically with “the Ethereum improvement proposal 1559” it was determined that with every transaction carried out on the blockchain, a portion of Ether would be burned, as a compensation mechanism to the issuance of coin as block reward.

Unlike Bitcoin where the halving mechanism on miner rewards and the supply defined at 21 million contribute to the strength of the asset price, in Ethereum these conditions are not there by default.

Ethereum in fact has an infinite max supply and prior to this update the cryptocurrency was seen by investors as potentially very inflationary.

The basic concept of the coins burn is that the more activity on the network, the lower the inflation of the network.

Since August 2021, when the Ethereum hard fork was executed, it has burned more ETH than have been mined again to pay for block validation.

This means that so far the mechanism has allowed the network to bring down the burden of inflation, even becoming deflationary and eliminating excess ETH worth $9.7 billion

It is not certain that this condition will remain so over time. However, VanEck believes that the “burn ratio” will reach 80% in 2030.

This is a key cue that shows how the Ethereum network is conceived as being of extreme value to VanEck and what the growth expectations are not only in terms of price but also in the amount of transactions and value that will be stored on it.

https://en.cryptonomist.ch/2023/05/25/openai-launches-chatgpt-apple-store/

In this article, we look at the latest relevant news regarding developments at OpenAI and its flagship product ChatGPT.

The chatbot has been successfully launched in Apple’s app store and meanwhile Sam Altman, the CEO of the artificial intelligence company, has announced that they might leave the European market if regulations do not become more flexible.

Full details below.

OpenAI and the launch of ChatGPT on the Apple Store: millions in profits lost in fees

Last week OpenAI launched ChatGPT inside the Apple Store and immediately enjoyed huge success.

Right from the start, the chatbot topped the charts in the free app category, probably due in part to the “must have” label given to it by Apple.

The product is currently available only to users in the United States but may soon be rolled out to other countries.

However, the multinational tech company, founded by the famous Steve Jobs, does not seem to be interested in developing its own “generative AI” system capable of generating text, images, and video for users.

Rather, Apple prefers to exploit the success of others and take the now well-known 30% fee on internal sales of its app store.

Specifically in this case, Apple will take $6 to $20 monthly from iOS users for each ChatGPT Plus subscription

Given the success of ChatGPT and its rapid expansion across the planet, this “little trick” could cost OpenAI millions of dollars in fees.

Despite “Apple’s bite” of 30% on the app’s profits, the AI systems developer preferred to opt for the native in-app purchase system instead of choosing to go a separate route.

The crypto world community did not take the news very well arguing that in-app NFT purchases would become an expensive affair.

Some have ironized the matter by saying that Ethereum, a blockchain that is more expensive in terms of gas fees, is cheaper than Apple.

OpenAI could exit the European market due to regulatory pressures

While OpenAI is pushing hard in the US with the launch of ChatGPT in the Apple store of iOS operating systems, the same cannot be said in Europe.

Overly stringent regulations could hold back the company’s expansion on the continent even leading to a cease of operations.

According to rumors reported by Reuters, Sam Altman, CEO of OpenAI, has reportedly stated that if the company fails to comply with AI regulations in the Union it will withdraw from the European market.

These are his words: 

“There’s so much they could do, like changing the definition of general-purpose AI systems. There’s a lot of things that could be done.”

Going into more detail, the EU AI Act would require companies to disclose copyrighted materials used in the development of generative artificial intelligence, which would greatly penalize OpenAI.

To be fair, even Apple, in the wake of other companies’ decisions, reportedly recently banned its employees from using ChatGPT, fearing the loss of confidential data and storage on third-party servers.

Nevertheless, over-regulation could harm Europe by depriving it of the developments and advances that AI could bring institutions to society.

In this regard, there are rumors that the EU AI Act is likely to be withdrawn because it is incapable of meeting market needs and potentially detrimental to the European Union.

The European Parliament has invited Joe Biden to jointly discuss the topic of AI with the European Commission and Ursola Von Der Leyen, with the intention of producing a set of guidelines for the development of the sector. 

A few days ago, during a panel discussion at University College London Altman said that OpenAI will try hard to comply, but if it fails to do so, it will not hesitate to cease operations on the European continent.

Solana launches a plugin for ChatGPT

As OpenAI grows in popularity after the launch of ChatGPT in the Apple Store, Solana is trying to carve out its own space.

A few days ago, the layer 1 blockchain announced that it had created an open source implementation that would allow its users to perform on-chain actions on Solana directly through ChatGPT.

The Solana community, already enthusiastic about the launch of the web3 smartphone “Saga” showed even more muscle after this integration that is of fundamental importance for the developments of the chain.

Solana‘s foundation on the news stated the following:

“This integration from Solana Labs serves as a reference for how AI can make it easier to understand Solana data and protocols, or surface data about Solana’s computing infrastructure and DeFi projects.”

Anatoly Yakovenko, CEO of the “Ethereum Killer” network, believes AI will make Solana more usable and more understandable by enabling users to purchase NFTs, inspect data and transfer assets with minimal effort.

The blockchain firmly believes in the future of artificial intelligence, so much so that it has announced a willingness to invest $1 million to $10 million in strategic grants.

In a very short time, about fifty applications have already surfaced, motivating the foundation to invest in human resources, which are still scarce in the AI sector.

In particular, Solana will launch a 3-month accelerator program for university students dedicated exclusively to experimenting with blockchain technologies and artificial intelligence.

https://en.cryptonomist.ch/2023/05/25/artificial-intelligence-dangerous-crypto/

Artificial intelligence has a love-hate relationship with crypto and blockchain technology: although the advent of ChatGPT has brought awareness of the full potential of AI in the world of trading, big data, and smart contracts, there are still some dangers that the crypto community needs to distance itself from.

In particular, Binance believes that through deepfakes, some malicious users are able to evade KYC verification systems by scamming companies and investors.

Crypto alert: artificial intelligence and deepfakes

First “red flag” in the cryptocurrency world regarding the much-loved artificial intelligence technology.

According to Jimmy Su, head of security at Binance, the next wave of scams for the industry will be spearheaded by deepfakes, which are spreading thanks to AI software.

Through machine learning, deepfakes are able to recreate highly plausible (but fake) images or videos from real content on networks.

In particular, these fake versions highly realistically recreate features, movements of a face, body, or even faithfully reproduce a particular voice.

In doing so, cyber-criminals are impersonating some of the prominent figures in the crypto community by carrying out well-thought-out scams.

Although this technique can be honestly and advantageously applied in daily life and work, bringing benefits to those who use it, it can be both detrimental to crypto companies and investors.

Last August, Binance‘s communications manager Patrick Hillmann warned that a group of hackers was recreating a deepfake version of him from video interviews on the web and from his TV appearances. 

The “deepfake” version of Hillmann was then used in online meetings on Zoom with crypto project teams who were promised the price of tokens in exchange for payment.

The only way to combat the spread of fraud of this kind, according to Jimmy Su, is to educate users by pointing out the fallacies that artificial intelligence presents in recreating content.

Binance believes artificial intelligence can compromise the KYC verification systems of crypto projects

The crypto exchange Binance and its chief security officer believe that artificial intelligence and deepfakes can compromise KYC verification systems by putting users’ data and funds at risk. 

This is not specific to Binance, where there are sophisticated verification automations, but in general to all crypto-themed projects where there is a need to verify the identity of individuals through the classic “Know your customer” (KYC) procedure.

The modus operandi for the evasion of these systems is the following: first they search online for some photos of the victim, then thanks to AI tools they start to produce highly realistic videos of which one might not notice the fake characters.

Jimmy Su argues that deepfakes are spreading mainly for the purpose of implementing scams, especially for crypto enthusiast communities. 

However, he believes at the same time that the overall quality of the fake videos are not yet such that they can fool human verification.

Binance plans to publish a series of blog posts to inform users about risk management methods.

In the first content published by the exchange, it was stated that the company uses artificial intelligence and machine learning algorithms to detect anomalous login patterns and transactions on the platform.

Hence, it is possible to exploit AI for non-fraudulent purposes, but there is a need to be careful about the development of this technology because it could create significant damage in the crypto sector.

A Web3 security expert, in reference to deepfakes, believes that they could be misused in Ledger‘s new “Recover” update, where users can request the hardware building company to have the seed phrase sent to them if they lose it, after verifying their identity through KYC verification.

The best crypto assets that integrate AI technologies

More and more projects are emerging within the crypto market that integrate artificial intelligence technology into their business, in more or less concrete ways.

Sometimes the AI narrative and the appeal it has on the public are exploited to attract attention and generate trading volumes on tokens that do not actually have fundamentals behind them, but only good management of communication and marketing programs.

Most of these use within their names words such as “GPT,” “AI,” “CHATBOT,” sometimes mixing them with the brand name of some famous memecoin.

Nevertheless, the artificial intelligence trend is allowing serious projects such as Singularity Net, The Graph, Render Token, Fetch.ai, and Injective to increase their capitalization.

In this regard, the “AI and Big Data” section of cryptocurrencies on CoinMarketCap has surpassed the $5 billion mark, with a significant increase from the beginning of 2023.

It is probably still too early to see a true explosion of the artificial intelligence trend, given and considering that there are few truly applied use cases in the crypto world excluding those where scams are attempted.

ChatBots, automation of trading systems, and big data detection are certainly important and will be one of the drivers by which the next bullish markets will be undertaken.

However, we still have a long way to go and need to build more efficient products for a real revolution.

In the meantime, we can have fun creating a deepfake video with the face of CZ (CEO of Binance) in which the delisting of your best friend’s favorite crypto is announced, subsequently sending him the fake content and seeing how he reacts. 

However, be careful to limit the prank in private channels without creating FUD within the community.

https://en.cryptonomist.ch/2023/05/24/liquid-staking-leads-way-ethereum/

Following the Shapella update, which allowed Ethereum users to withdraw coins previously put into staking, liquid staking platforms such as Lido, Frax and Rocket Pool increased their market share to hold 46% of all ETH deposited on the Beacon Chain.

If there were no such entities, centralized exchanges would have dominance over this type of activity and Ethereum would likely suffer from a “point of failure” in terms of producing blocks in the chain.

Ethereum: liquid staking providers control 46% of the market

After only 42 days since the Shapella hard fork, which enabled the unstaking of all ETH previously put into staking by the Ethereum community, we can observe how liquid staking platforms (LSD) have a decisive position in the network, controlling 46% of all coins delegated to block validation and production through the proof-of-stake consensus mechanism.

Prior to the Merge on 15 September 2022, the delicate task of block production fell to the miners, who lost that privilege with the move from PoW to PoS and the Merge of the Ethereum Mainnet with the Beacon Chain.

Now, only stakers, specifically all those individuals who hold at least 32 ETH, can participate in the activity and earn block rewards (2 ETH per block) and user transaction fees.

Liquid staking platforms, increasingly important in this context, provide a solution for small crypto investors who do not hold 32 ETH but still want to participate and improve network security.

All of these providers such as Lido, Ricoket Pool, Frax, and Stakewise hold a total staking share of 9,083,663 ETH ($16.57 billion), which corresponds to almost half of all ETH locked in the Beacon Chain.

Notably, Lido controls 73.3% of all this capital, confirming itself as the undisputed leader not only in the world of liquid staking, but also in the DeFi sector in general, with a TVL of over $12 billion.

LSD platforms reduce the risk of centralization in Ethereum staking

The fact that LSD providers have a central role within the Ethereum staking mechanism is good for the community, which would otherwise risk falling victim to network centralization.

When the role of block validation was the responsibility of the miners, prior to the Merge, this risk was decidedly low, given the difficulties from a technical standpoint to concentrate a large amount of hardware within a single entity.

Now, however, as stakers have taken over, the risk of centralization has become much more concrete, especially after many exchanges such as Binance, Coinbase, and Kraken have offered their own version of staking, concentrating capital in their platforms.

In this sense, if providers such as Lido, Frax and Rocket Pool did not exist, all those who do not have a monetary base of 32 ETH or more and those who do not have the skills to operate independently would concentrate their ETH on centralized exchanges, which offer more elastic solutions.

Binance and Coinbase, for example, offer all users who decide to delegate their ETH to them a token representative of the stake, exchangeable directly on their own exchanges, for a spread.

This is compounded with the advantage of having significantly lower fees than those we find nowadays on Ethereum.

Obviously, users more savvy in the DeFi world don’t mind gas fees and prefer to participate in staking in a decentralized way, taking advantage of one of the many non-custodial wallets available on the market, such as Metamask, Trust Wallet or Ledger.

For now, the risk of a “point of failure” in the Ethereum consensus is under control, but it will be necessary to monitor the situation and the trend of capital orbiting among the various LSD providers to see if this problem will arise in the future.

ETH deposited in Beacon Chain hits new all-time high

As LSD platforms strengthen their market share in Ethereum staking, we can observe how the number of ETH deposited in the Beacon Chain, and in parallel the number of validators participating in validation in the network, have reached a new all-time high.

Notably, at the moment there are 18.6 million coins locked within Ethereum distributed among about 571,000 validators.

On average, each validator holds a total of 32.57 ETH.

The figure is very important because a high number of ETH staked and a high presence of validators strengthen the security of the chain and prevent cyber attacks.

In Bitcoin‘s network, where the consensus mechanism is the classic proof-of-work, this metric is represented by the “total hash rate,” which corresponds to the computing power that each miner devotes to the network.

In Ethereum, on the other hand, security is represented by the number of coins delegated to staking and block production.

Those who participate in this activity, which is critical to the survival of the ecosystem, are rewarded with variable annualized returns, which currently hover around 4.2%.

However, Ethereum’s staking yield curve is set to fall over time, yet those who produce a block also earn from users’ transaction tx fees, which vary depending on network congestion.

In addition, extraction maximization techniques such as MEVs, allow for more competition within the network and allow stakers to earn more than they actually deserve.

https://en.cryptonomist.ch/2023/05/24/crypto-assets-potential-uniswap/

In this article we look at some of the cryptocurrencies that are trending the most on Uniswap, particularly memecoins and utility tokens.

Which crypto assets are gaining increasing popularity in the market? Is it worthwhile to make altcoin purchases at such a sensitive time in the market?

All the details below.

The most popular meme-based crypto assets on Uniswap

Let’s start with the review of the most in vogue memecoins on Uniswap by talking about Wagmi (WAGMI) whose name represents an abbreviation of the phrase ” We Are All Gonna Make It”

The token symbolizes the enthusiasm and unwavering emotional strength of the crypto community and for this reason could be taken in sympathy by degen traders in the DeFi world.

WAGMI has a capitalization of only $5 million and a circulating supply that coincides with its maximum available limit, hence technically no new tokens should be minted.

In the past 24 hours, the crypto has climbed more than 20% and may continue on this path in the coming hours

Let’s now turn to a crypto that was inspired by the famous internet meme Wojak, a cartoon drawing with black outlines of a bald man with a melancholy expression, also known as Fells Guy.

We’re talking about crypto Copium (COPIUM), which in its community represents the relentless resilience of crypto traders, who despite suffering losses during bear markets, always manage to bounce back.

COPIUM symbolizes emotional investment awareness and the importance of an operational strategy to apply to trading.

The token also capitalizes about $5 million, with a circulating supply equal to the total supply. The volume in the last 24 hours has been higher than the project’s marketcap, synonymous that there is interest in speculating on COPIUM at this time.

From 21 May to today the crypto has risen more than 50% and being a project with a micro capitalization it could easily grow if whales show up to buy on Uniswap.

Finally, mention should be made of the interesting crypto Turbo (TURBO), a memecoin created by digital artist Rhett Mankind through the AI ChatGPT platform.

It differs from other tokens that echo famous internet memes or symbolize virtues inherent in crypto communities precisely because it was created with artificial intelligence software.

TURBO capitalizes $25 million and has a max supply coincident with the circulating supply.

The token has been going through a prolonged bearish phase in recent days, but it is worth keeping an eye on for possible rebounds and upward restarts.

Utility token presale: which crypto assets will quickly trend on Uniswap

Let’s now move on to the analysis of 3 crypto assets that present utility tokens within their projects, which are currently being sold via presale and could easily trend on Uniswap as soon as they are listed: we are talking about AIDOGE, ECOTERRA and LPX.

Starting with AIDOGE, which may look like a memecoin at first glance, presents an innovative project with a utility case that integrates blockchain technology and artificial intelligence.

The token powers a meme creation platform where creators can be rewarded if their content goes viral within the community.

AIDOGE represents the token with which users can take advantage of the AI software as well as the currency used as a reward for prominent meme creators.

At the moment the crypto is still in a presale stage, but it could become trending once it is listed on Uniswap.

Another crypto whose sale is taking place via presale is Ecoterra (ECOTERRA), a utility token that combines blockchain with environmental activism.

The project features a “recycle-to-earn” model that attracts users to take sustainable actions for the globe given the opportunity to earn cryptocurrencies for free.

Through a dedicated mobile app, individuals can demonstrate their commitment to the environment and be rewarded with ECOTERRA tokens.

The platform has been audited by Certik and the project team has formed numerous partnerships with a number of organizations concerned with environmental sustainability.

Currently more than $4 million has been raised for the token launch, which can be purchased right now at a price of $0.00925.

Finally, the last crypto worth mentioning is Launchpad XYZ (LPX), which is part of a unique project that attempts to take full advantage of the trend of Web3 technologies.

Launchpad XYZ’s platform helps users discover emerging assets before they explode. 

In fact, on the project’s website the first thing that stands out is the slogan “find the next $PEPE before it explodes.”

Using in-depth data-driven analysis, the project can predict market sentiment, assess fundamentals, and identify industry trends.

LPX is also at a stage where buying is only possible via presale, but as soon as it is listed on Uniswap there could easily be a token price pump.

At the moment the crypto is priced at $0.046, but it is expected to increase based on the number of capital raised, which amounts to $580,000 for now.

Is it worth buying altcoins right now?

In this article we presented a number of crypto assets with potential behind them that could see their value grow on decentralized platforms such as Uniswap.

However, all the talk we have given must be subject to the macroeconomic conditions of the financial markets, the performance of BTC, and the situation of the altcoin industry.

Unfortunately, all crypto assets with high potential and market capitalizations of less than a billion dollars present a very high risk being seen in their primordial era exclusively as speculative assets.

In situations where there is talk of a possible US default with a US debt ceiling crisis, and where in the crypto sector trading volumes are at multi-year lows, perhaps overbalancing on the altcoin side could be the wrong choice.

In addition, there is the fact that BTC dominance is in a bullish phase, which corresponds to a momentum in which liquidity is flowing out of coin alternatives and into Bitcoin.

When BTC dominance is declining, especially when it breaks the 60-week moving average to the downside, then we may more calmly plan entries on altcoins.

Investors see meme-based crypto assets and utility tokens not yet established in the market as too risky, hence there is a need to be careful.

Devoting a very small part of one’s portfolio to this kind of speculative activity makes sense and is probably the wise thing to do.

However, being heavily exposed or, worse yet, going all-in on some token of which one does not yet have an extensive history, is pure madness.

Be careful traders, and always do your research

https://en.cryptonomist.ch/2023/05/23/supply-tether-erc-20-remains-unchanged/

Good news for Tether, the company that manages the issuance of the USDT stablecoin, which is gaining more and more market share by confirming itself as the industry leader, except for the world of ERC-20 tokens where activity remains flat.

USDT’s market capitalization is approaching new all-time highs effectively undoing the losses incurred during the bear market, but at the same time it is possible to observe that on the Ethereum blockchain the supply of the stablecoin has remained unchanged for over a year: what is going on?

Let’s find out together in this article

Tether’s market capitalization heads for new all-time highs

Tether, the British Virgin Islands-based company that regulates and monitors the issuance of new USDT, is further strengthening its position in the stablecoin sector and preparing to set new records, but not in terms of the ERC-20 token market.

As of the beginning of 2023, in the midst of the US banking crisis that saw the bankruptcy of institutions such as Silicon Valley Bank, the supply of crypto USDT has risen from $66.2 billion to the current $82.9 billion, moving ever closer to the May 2022 ATH.

It is worth recalling that in the case of stablecoins, the circulating supply coincides with the market capitalization, provided that the token in question is priced at $1 and there are no ongoing depegs.

This means that in the case of 100% hedging with liquid assets (as is the case with Tether), the more stablecoins are minted and issued in the market, the more countervalue is stored in the issuing company.

Tether is approaching to record the highest supply ever which would suggest the possibility of a liquidity injection in the markets, but at the same time prices of most crypto assets remain low as well as trading volumes in USDT on centralized and non-centralized markets.

In this regard, USDT retains its hegemony only on CEXs such as Binance, Coinbase, Okx, and Bybit, but still plays a marginal role on DEXs in the DeFi world, with a market share of 20%, where the primacy of Circle and its USDC crypto reigns supreme.

The other stablecoins currently competing with Tether are DAI, TUSD, and BUSD but collectively cover a capitalization of just over $12 billion, far behind the frontrunner.

BUSD could easily lose its remaining market share after the SEC ordered Paxos to stop issuing the stablecoin owned by Binance. in accordance with guidance and coordination with the New York Department of Financial Services (NYDFS).

Changpeng Zhao‘s exchange as a counter-response is pushing the TUSD stablecoin with trading fee discounts and promotions, most likely with the intent to replace BUSD which unfortunately has its days numbered.

Tether is not growing in the ERC-20 token world despite capitalization nearing new all-time highs

Despite the fact that Tether is flexing its muscles against its main competitors and is poised to record the highest market capitalization ever, in the case of the Ethereum blockchain and ERC-20 tokens, USDT supply has remained flat over the past year.

Overall, the trend remains positive as the other stablecoins such as USDC, BUSD, and DAI have lost a lot of supply on Ethereum since last year with a drain of nearly $32 billion.

In detail, as of May 2022, Teher’s supply stood at $36.82 billion while today it stands at $36.28 billion. Over the same period, if we look at all existing blockchains, USDT grew by $5 billion while the whole stablecoin sector lost $28 billion.

Viewing the data from this perspective, the fact that USDT on Ethereum has made little progress turns out to be less serious than one might have initially thought. 

However, one question always remains: where did Tether’s growth take place if not with ERC-20?

As Tether is a company more focused on off-shore exchanges rather than using its product in DeFi environments, it seems more sensible that there isn’t as much interest on Ethereum as Circle is placing with USDC.

As such, the growth in supply, and consequently capitalization, has occurred on the Tron network where most USDT live, amounting to $42.3 billion.

Binance and Okx hold the largest USDT balances on Justin Sun’s blockchain, suggesting that whales and market makers prefer this network for its low fee costs.

Overall, Ethereum and Tron encompass about 90% of Tether’s supply, with the remaining 10% split between the BNB Chain, Solana, Omni, Avalanche, Polygon, Arbitrum, Algorand, and Fantom.

DeFi and stablecoin figures on Tron

Although the Tron network is the favorite of large investors for off-shore exchanges, DeFi also registers significant numbers in the world by standing as the second largest blockchain for TVL (Total Value Locked) in decentralized protocols.

There is currently $5.73 billion spinning in Tron contracts, with values lower only than Ethereum’s, despite the fact that there are not a large number of projects developed on this network.

Indeed, in the first three protocols on Tron, namely JustLend, JustStables and Sun there is practically 99% of all the TVL in the chain.

The infrastructure of Justin Sun, founder of the Tron Foundation and the cryptocurrency exchange Huobi, works more than 64% on decentralized lending on the JustLend platform where assets such as USDT, USDC, TUSD,TRX, SUN, BTT and many more can be staked and borrowed.

The second platform for TVL is JustStables where the minting of Tron’s native stabelcoin, which is USDD with a marketcap of $736 million, takes place.

Stablecoins represent the main focus of this network, where there are no other interesting protocols to mention outside of those mentioned. 

In fact, although Tron has a high TVL, it does not have much DeFi potential and is often underutilized, precisely because of the scarcity of projects within the ecosystem and the few opportunities it offers outside the crypto lending niche.

So why is so much capital flowing to Tron if it is such an underutilized blockchain (outside of the offshore market)? 

The answer probably lies in its founder Justin Sun, who funds his network with his own capital, making it poorly decentralized.

It is enough to consider the fact that the first 3 protocols of the chain refer back to his name, which suggests delusions of grandeur on the part of the 30-year-old multibillionaire.

In support of this thesis we can see how since 2022, when the bear market began and capital started to flow out of crypto markets and the DeFi sector, the TVL on Tron has remained almost unchanged, probably precisely because the majority of the money inside belongs to its founder.

If this were not the case, such a situation where market makers reduce their risk on chains such as Ethereum while keeping their positions on Tron unchanged would be strange indeed.

https://en.cryptonomist.ch/2023/05/23/us-crisis-better-bitcoin-gold-refuge/

The macroeconomic scenario is getting more and more complicated: following the latest revelations about the US debt ceiling crisis and a possible default of the world’s first superpower, there are already those who are speculating about taking cover with safe haven assets such as Gold and Bitcoin.

The cryptocurrency is increasingly being associated with yellow gold, even though the data show a big difference between the two assets, especially the correlation with stock markets.

Let’s try to explore this in more detail in this article.

Bitcoin and gold as safe haven assets in case of a US debt ceiling crisis

In difficult times like these, investors set out in search of the best safe haven asset, and again eyes are on gold and Bitcoin.

Following the banking crisis in March that saw the failure of institutions such as Silicon Valley Bank, now it is the turn of the US debt ceiling crisis.

The United States has a federal debt ceiling of $31.4 trillion: the threshold is about to be crossed after the mountain of debt that government and households have taken on in recent years.

According to the Federal Reserve Bank of New York, the amount of US household debt exceeded $17 trillion for the first time in the first quarter.

The figure gives pause for thought when we consider that since March 2022, when the Fed began a restrictive policy by raising interest rates on government bonds, households have increased their debt even more, which highlights that the change in lending rates does not affect the habits of US citizens.

Specifically, since the Federal Reserve first tightened its monetary policies, consumers have added more than $860 billion to total mortgage balances, $145 billion in credit card debt, $93 billion in auto loans and $14 billion in student loans.

As of today, the federal funds rate is between 5% and 5.25%, but it does not seem to have slowed down the US debt frenzy, especially as it relates to credit cards.

To be fair, between the end of 2022 and the end of March 2023 there were no notable increases, however, the figure shows that at $1 trillion, the interest Americans owe on their credit cards reached its highest point ever.

Asking for a balance on one’s card now comes at a very high cost, with an average interest rate of 20.92%.

While it seems crazy for Europeans to ask for credit at these rates, it is common practice in the US to take on debt in this manner considering that many households have debt on more than one credit card.

All this only alarms investors: this mountain of debt connected with high interest rates could push the US into a debt crisis, provided the government does not raise the ceiling as it did in previous years.

What do investors prefer in times of crisis: gold or Bitcoin? 

Let’s try to better understand investors’ attitudes in times of crisis.

At the Bitcoin Conference in Miami, which took place a few days ago, participants were asked to express their opinions about what they would buy if the US debt ceiling was reached, and they obviously chose gold and its virtual version.

However, these opinions are unreliable since everyone at the conference has a soft spot for Bitcoin and the crypto market in general.

Forbes, on the other hand, tried to take a more representative sample by asking 637 different investors which assets they would prefer in the event that the US defaulted on its obligations and did not pay its federal debts.

The result is very interesting: traditional gold comes in first place with an equal number of choices between retail and institutional investors, followed by US treasuries and Bitcoin taking the podium with 7.8% preferences from institutional and 11.3% from retail.

Traditional currencies such as the dollar, Japanese yen and Swiss franc lag behind highlighting a fallacy in being able to serve as safe haven assets, at least according to investors’ thinking.

Bitcoin and gold have always been praised for their decentralization and deflationary nature, although cryptocurrency, unlike the yellow metal, also enjoys the characteristic of being resistant to censorship.

With Bitcoin, it would not be possible to replicate what US President Franlink D. Roosevelt did when he issued Executive Order 6102 on 5 April 1933 with the aim of prohibiting the possession of any form of gold, depriving its citizens of it.

Satoshi Nakamoto designed his virtual cryptocurrency in such a way that it could withstand these attacks and serve as a true reserve, not controllable by anyone.

Beyond that, gold is certainly a more conservative and more reliable choice, given the presence of a broader history of price performance and given the low correlation with stock markets.

While over the past 5 years gold had a correlation index of 0.04 with the S$P500, Bitcoin records a very strong correlation of 0.88, meaning that it often moves in the same direction as stocks.

What would happen to the crypto market if the US goes into default? 

The US is approaching the debt ceiling set during 2021, fueling fears of an inability of the government to repay bondholders consequently leading to a default of the nation.

However, it is often forgotten that the federal “debt ceiling” has been raised as many as 78 times since 1960 until the last time Congress decided that value to the current $31.4 trillion.

Until 2007, before the global financial crisis, the federal debt had been held below $10 trillion. 

Within 15 years this has more than tripled resulting in a red-hot political climate between Democrats and Republicans.

The fact that the debt is approaching the maximum allowed ceiling does not necessarily mean a risk of default: first, because the debt ceiling can be raised even 1 day before the ceiling is exceeded.

Furthermore, in extreme cases, a “government shutdown” would take place, i.e., a cut in government costs starting with salaries of nonessential employees and moving on to payments of suppliers of goods and services, current expenditures, etc.

Markets would be immediately affected by this contingency plan, but it would still be possible to avoid default, which would lead to much more disastrous effects.

In the most pessimistic case, i.e., one in which the US proves unable to honor the federal debt in the coming months, markets, especially the more speculative ones such as cryptocurrency markets, would experience a colossal downturn.

While Bitcoin and Ethereum would probably be able to weather the storm, albeit with double-digit negative price changes, many tokens in the altcoin segment would perhaps not be able to survive.

All the more so if we are talking about cryptocurrencies with no fundamentals behind them or with derisory projects such as memecoins, a default could spell the end of these financial experiments, while in the long run assets with more intrinsic value would still manage to emerge.

https://en.cryptonomist.ch/2023/05/22/strike-supports-usdt-stablecoin/

Strike, a crypto payments company, has announced its expansion to 65 different countries and the introduction of a new feature that allows the exchange of USDT as well as BTC within the app.

This is a step toward mass adoption of the cryptocurrency industry, especially for those less developed countries that lack a stable and well-established state currency.

Let’s take a look at the details of the news.

Strike expanding to 65 countries: stablecoin USDT also integrated

On Friday, 19 May 2023 at the Bitcoin Conference in Miami Beach Jack Mallers, CEO of Strike, announced that his company is beginning to offer services in 65 different countries spread across 6 continents, expanding from its initial client base in the US, Argentina, and El Salvador.

The news coincides with a redesign of the Strike app interface and the integration of the USDT stablecoin.

Now all users of the crypto payments app can take advantage of the elasticity of exchanges in Tether as well as Bitcoin. 

More specifically from now it is possible to send Bitcoin using USDT balance and receive payments in Bitcoin by immediately converting the balance to USDT

Strike’s strategic move will serve to more easily land within those countries where there is no strong currency such as the dollar and where there is an out-of-control inflation rate that endangers the purchasing power of citizens.

The introduction of a stablecoin in the application like Tether‘s, which replicates the value of the US dollar, is of paramount importance because it eliminates all fears related to Bitcoin’s volatility and the inability to use it as an everyday trading currency.

At the Bitcoin Conference, Jack Mallers made his vision explicit in reference to the latest update by saying:

“We’re delivering a cash balance that the global south can rely on, and an awesome beautiful punk unconventional black and white brand, as the Fed is driving our own banks insolvent. We made a lot of product changes to support what we hope to become an amazing global money app.”

The ultimate goal of the CEO of Strike is to serve 7-8 billion people and reach countries that do not enjoy well-structured financial services such as those found in the US or more economically advantaged countries.

Bitcoin’s Layer 2 network, namely the Lightning Network, will be critical in this process because it enables microtransactions at a negligible cost and with a higher execution speed than major fiat payment providers such as Visa or Mastercard.

The long-term challenge is to expand the reach and number of lightning nodes by allowing more money to flow within these dedicated channels

Strike’s advantage in supporting USDT within the app

As anticipated, the integration of USDT within the Strike app is an important step forward in an effort to incorporate as many users as possible into the cryptocurrency industry.

Bitcoin’s volatility has always been conceived of as a problem by outsiders, who perceive the virtual currency to be too volatile and unable to be leveraged as an exchange asset in payments.

The point of the argument is that for countries where there is currently a double-digit inflation rate, the problem persists even in state-owned fiat currencies, and indeed is even more serious since these, unlike Bitcoin, only lose value and have hardly ever experienced bullish phases against the dollar in the Forex market.

In any case, with the introduction of the USDT stablecoin, all fears related to Bitcoin’s volatility have finally vanished, given the possibility of using a cryptocurrency that replicates the value of the US dollar, which is also subject to inflation but much more stable than the fiat currencies of African and South American countries.

On this integration, Strike’s vice president of product, Manuela Rios explained the positive impact it could generate in society in developing countries, stating:

“For the people not yet so familiar with bitcoin, but are familiar with 109% inflation, giving them access to a U.S. dollar equivalent stablecoin is massive — now you can save in something that won’t be so quickly devalued.”

In addition, Tether, the company that manages the stablecoin, is among the elite of the most important and influential companies in the cryptocurrency world, with a very important financial strength.

In this regard, it is interesting to point out that USDT represents the most liquid and utilized stablecoin within the crypto markets, with a market share of 65% compared to major competitors such as USDC, BUSD, DAI, and TUSD, which has increased significantly since the beginning of 2023.

The challenge of crypto payment providers

There are currently a huge number of providers dedicated to cryptocurrency payments besides Strike such as Coinpayments, CoinGate, Moonpay, Wyre, Coinremitter, Bitpay etc.

The international Visa and Mastercard circuits have also prepared to integrate the ability to perform cryptocurrency transactions into their services.

The competition is beginning to pick up, considering the fact that the crypto sector is becoming less and less of a taboo and is increasingly appreciated as a respectable fintech industry.

The main challenge that all crypto payment providers will face is definitely that of user-side simplicity.

Unfortunately, when it comes to cryptocurrencies and blockchain, there is still a knowledge gap that needs to be bridged and that acts as a barrier to mass adoption of the industry.

Terms such as wallets, private keys, addresses, transaction hashes, and block explorers are extremely complicated for those unfamiliar with crypto and even more so for the financially uneducated.

Being able to present products that are intuitive and easy to use even for novices is the main focus that all these companies should have nowadays.

Although innovations are running faster than we can imagine, and new trends such as zk rollups, layer 0, and AI are increasingly gaining the attention of the savvy, in order for crypto to truly become mainstream it is necessary to take a step back and focus on the factors of simplicity and essentiality.

Only in this way will it be possible to grow this market that unfortunately still covers only a niche of individuals and expand to mass adoption.

Secondly, the issues of trust and security also turn out to be crucial in this process, after a multitude of past events have undermined the reputation of the crypto sector by making it appear as dangerous.

In fact, on this front the community is not yet ready: punctually every year an exchange or service that holds crypto for customers disappears, causing harm to users of those platforms and generating distrust of new Web3 technologies.

When all the scum have finally gone out of business, and new regulations come into effect in the US, with only the most serious companies remaining, we will be able to start thinking about expanding the industry to new horizons.

https://en.cryptonomist.ch/2023/05/22/twitter-community-doesnt-trust-ledger/

Ledger, a company that produces hardware devices for the self-custody of cryptocurrencies, announced a few days ago the introduction of a new service that has sent the Twitter community into an uproar.

Through the new “Recover” feature, users can back up their seed-phrase and retrieve it if they lose it, helping the operations of newer users but simultaneously threatening the security of the devices and the privacy of users.

Let’s try to delve deeper into this issue and understand whether “Recover” is good or bad for the community

Ledger’s new “Recover” service

Self-custody techniques for cryptocurrencies have always raised some fear among those who have recently entered this fascinating and at the same time dangerous world.

Self-storing the private keys of the wallet in which one holds one’s cryptocurrencies has become a must, especially after the succession of scandals of centralized exchanges and third-party services that over the years have declared bankruptcy (or worse, scammed investors), leaving clients holding the bag.

However, independently safekeeping a 24-word phrase that allows those in possession of it to access and spend their virtual money is not something everyone can do, especially the forgetful or those unfamiliar with new technologies.

That’s why Ledger, a French crypto hardware wallet manufacturing company, has decided to launch a new service called “Recover” dedicated to anyone who needs to recover their private keys after losing or destroying their physical device.

In detail, Ledger Recover allows users to restore the seed phrase via a cloud backup that fragments the secret phrase into several parts and sends the encrypted components to 3 separate servers via the Shamir Shared Secret, which is a secret sharing algorithm for private information.

The 3 servers in question belong to Ledger, Coincover, and EscrowTech, companies that store users’ encrypted backups when requested and later return the seed phrase in a “fragmented” manner to the original owner.

In this way, none of the 3 intermediaries are by themselves potentially able to reconstruct the keys to access the wallet thus decreasing counterparty risk.

In order to access the service, the end user must first verify his or her identity through a procedure similar to KYC and send his or her data to Onfido and Tessi, two Ledger providers employed for this delicate activity.

The Recover function is available only for the Nano X version of Ledger, not the Nano S version, and is viable upon performing an opt-in upgrade.

Owners of Nano X devices are not required to upgrade and can continue to store their seed themselves without the help of any intermediary.

Community doubts about the security of Ledger hardware devices

Although the Recover function is undoubtedly a help for all those individuals who have failed to guard their seed-phrase and lost it, on the other hand it is very dangerous in terms of security, according to what the Twitter community has said.

Indeed, on the social media, many users have expressed their disapproval of a service that goes against the ideals of self-custody and could undermine the privacy and security of Ledger devices.

In particular, many individuals fear that there is a backdoor in the firmware (a software installed in the chips of Ledger devices) that allows the parent company, and hence potentially third parties, to access customers’ wallets at any time

In this regard Pavol Rusnak, co-founder of SatoshiLabs, which produces a competing hardware wallet (Trezor) said:

“For a hardware wallet to transmit the seed or shares that can reconstruct the seed over the internet fundamentally alters the security threat model of a hardware wallet.”

The issue became more sensitive when the official Twitter profile of Ledger support admitted that the installation of firmware could facilitate the extraction of users’ private keys, contradicting a tweet published in November last year where it was said that from the Secure Element (chip embedded in hardware wallets) it was not possible in any way to extract seed data.

The recent tweet was deleted by Ledger because according to the CTO, Charles Guillement, the communication risked being misunderstood and producing confusion among the community, but it was promptly screenshotted by a few users, such as by Olimpio Crypto.

Summarizing the debate that subsequently ensued between Ledger’s CTO and the community, it emerged that the underlying problem is that Ledger POTENTIALLY could handle malicious firmware, but all users who have trusted it up to now should not be afraid for an already existing “issue” only now.

The French wallet device company has emphasized its deep professionalism in its intentions, reminding that it is in its interest to protect its customers.

However, the trust issue remains, this flaw in firmware management having been highlighted and amplified by the company’s disastrous communication management.

It is worth recalling that in order to have a totally trustless self-custody crypto solution, that is, without trust components of any kind, it would be necessary to create one’s own device and software so that only the owner can get his hand on the code.

A certainly more pronounced problem is the fact that anyone using Ledger Recover gives the providers Onfido and Tessi their identity and that the latter, in the event of a hack or data leak, could end up in the wrong hands.

Even law enforcement agencies could in this sense get hold of the identity of those who use the Recover service and access their funds through subpoena against Ledger.

Violation of the principles of self-custody or support toward novice users?

The introduction of Ledger’s Recover function has triggered a very interesting debate about what is necessary and what is dangerous for users.

According to the French company, allowing users to retrieve their private key, something like what happens in credential retrieval on major Web 2.0 platforms, would help many individuals jump on the cryptocurrency bandwagon by embracing innovation.

On the other hand, this all poses a risk for those who decide to take advantage of this solution, with the understanding that there remains the possibility of “doing it yourself” by avoiding the collaboration of external intermediaries. 

In fact, activating the firmware that would create this “point of failure” still requires the approval of the user at the final stage, who can still refuse it and continue using the old software.

In this regard, a tweet from Ledger’s support, now deleted due to the shitstorm that was caused, said:

“Every firmware update requires a PIN unlock device approval, this is the final line that makes it impossible for us to extract your keys even if we had your device.”

While it remains the case that Ledger has come off badly in its handling of the reputational crisis, it is quite clear as of now that firmware updates are not a serious problem for users, provided they have trusted the company to date.

The real problem lies in the fact that those who choose to use Recover, in addition to choosing to place additional trust in Ledger to install an update, must compulsorily disclose their identity to two separate providers who could, in good or bad faith, lose or give away this data to other companies or government agencies.

The privacy component, which is central to the narratives of self-custodial advocates, is effectively zeroed out by this type of functionality.

At this point, the real question to ask is not whether or not to use Ledger Recover (obviously NO) since it is unquestionably better to be more diligent in the safekeeping of the seed phrase and avoid a counterparty risk, but rather whether or not it is better to use centralized wallets with decidedly more user friendly user interfaces given that the service is dedicated to those who have recently entered the cryptocurrency industry.

Why store funds on a hardware device that allows mere safekeeping when there are providers such as Binance and Coinbase that add advantages such as having several in-house marketplaces where to trade cryptocurrencies?

Then again, if one is unable to perform a simple but delicate task of safely safekeeping a 24-word phrase that gives access to one’s funds (which in itself is legitimate for newbies) why not choose to take advantage of more conveniences?

The best thing to do would be to gain experience on centralized platforms that do all the “dirty work” for you, and as you gain knowledge and expertise move to non-custodial wallets, (trusted by the manufacturers) and handle the securing of the keys to the assets within on your own.

Always remember: not your keys, not your coins