Issue #16

Market Overview

As of the time of writing (Monday 5pm), the total market cap of the crypto asset market is $US836.1B, down 0.6% from last week.

Below is the weekly performance of the top crypto and NFT assets. 

News Headline Highlights

• The world’s largest publicly-traded hedge fund, Man Group, is reported to be starting a dedicated cryptocurrency hedge fund as soon as the end of 2022, despite the recent FTX chaos. 
• Nike is set to debut its own platform for web3 wearables, commencing with its first digital collection, ‘.Swoosh’
• This week’s headlines continues to centre around the fallout from the collapse of popular retail and institutional crypto exchange FTX and related hedge fund, Alameda Research. Updates from the week include:
  • Alameda Research is reported to have loaned $4.1B to related parties, including $1B to SBF.
  • Last week we reported that FTX administrators had lost $600m in crypto assets from a hack. In a crazy turn of events, it appears the assets were seized by the Bahamas regulator with the help of SBF.
  • Incoming FTX CEO, John Ray III, had scathing comments about FTX in the initial bankruptcy filing, commenting that the crypto group's lack of controls was worse than Enron.
  • Customer trust in centralised crypto exchanges seems to have reached all time lows demonstrated by bank runs occurring on most exchanges. Crypto exchanges have responded, attempting to soothe clients' nerves through demonstrating their ‘proof of reserves’.
  • DCG owned prime broker, Genesis Capital, are reported to be seeking an emergency $1B loan to overcome an asset-liability duration mismatch on their balance sheet.
  • BlockFi is said to be preparing their bankruptcy filing after having significant exposure to FTX. After receiving a line of credit from BlockFi earlier in the year, it appears part of the terms included moving custody of assets to FTX. As of now, it appears BlockFi are now left with their assets and line of credit frozen.
• Documents made public on November 10th reveal Sony applied for a patent in 2021 for a system that tracks digital assets in video games using blockchain technology—specifically NFTs.
• The Australian Stock Exchange has abandoned its 6 year blockchain project to replace CHESS, writing off $250m. Magnet Quick Take: This always seemed like a doomed project, launching a closed network blockchain with extensive customisations and work-arounds is kind of the antithesis of open public blockchain networks. The ASX should have invested in exploring the opportunity to build a solution on Ethereum instead.

 Crypto Asset Project Updates

• In the wake of FTX’s collapse, users seem to be adopting decentralised exchanges  in favour of centralised exchanges, with Uniswap now producing more ETH trading volume than Coinbase on a regular basis.
• Stablecoin issuer, Circle, says businesses who accept USDC can now interact with Apple Pay. This means that exchanges, marketplaces, crypto gaming, crypto wallets, and other crypto businesses all have the option to set up Apple Pay for payments.
• Thorchain saver vaults are live. This means that native asset holders of supported blockchains (Bitcoin, Ethereum, Cosmos, Litecoin, Bitcoin Cash, Avalanche, Binance and Dogecoin) can now stake assets to earn yield in a transparent Defi protocol.
• Ethereum layer 2 scaling product, StarkWare, has deployed its StarkNet (STRK) token, to the Ethereum mainnet. The StarkNet Token was designed to help StarkNet achieve decentralisation through voting, staking and fee payments.

The Weekly Deal Room

• Matter Labs, the developers of Ethereum layer 2 scaling solution zkSync, raised $200m in their Series C led by Blockchain Capital and Dragonfly.
• Virtualness, a mobile-first platform designed to help creators and brands navigate the complex world of Web3, raised over $8m in seed funding led by Blockchange Ventures.
• Revv, a DeFi marketplace infrastructure protocol, raised a $5.5m seed round. The raise was closed in Q2 2022,but only announced on Nov 17th.
• Heroic Story raised £5m in a seed round from Upfront Ventures and Multicoin Capital to build a blockchain based tabletop roleplaying game.
• Anode Labs raised $4.2m to develop the world’s first community-owned, decentralised Web3 platform that offers small businesses and individuals cash and tokenized incentives for connecting their energy storage assets.
• Yakoa, an NFT fraud detection startup, raised $4.8m led by Collab+Currency, Volt Capital and Brevan Howard Digital, to build tools to fight intellectual property fraud in web3.
• Web3 gaming monetization platform PlayEmber has raised $2.3m in a pre-seed round led by Shima Capital.

Metric of the Week

The number of bitcoin leaving exchanges has accelerated in the wake of FTX’s collapse. Bitcoin holders seem to be increasingly concerned about counterparty risk from holding assets on centralised exchanges, preferring to self custody at least until the dust settles. One of the core tenants of crypto is the ability to self-custody, this is a promising trend in user behaviour should it sustain/continue.

Source: Glassnode